Hoping to FIRE soon?

[FIRE hopeful]

Hello all. Appreciate the chance to come on here and share ideas with you all. To cut to the chase, my wife and I are hoping to FIRE sooner rather than later. Here is a breakdown of our financial situation:

Both in our late 20s (28 & 29) with a combined income of $265,000 annually. I own my own business and my wife works for the government. The saving breakdown as of today is as follows:

$192,000 in corporate brokerage account (I own a mix of mutual funds and valuable equities such as Amazon, Google, Apple, Disney, Chase Bank, SPYDR Growth ETF, Vanguard Megacap Growth ETF, etc.)

$5,500 in SEP IRA

$14,800 in our Joint Savings Account

$76,000 in Corporate Operating Account.

$3,500 in Wife’s ROTH IRA

Debts: $167,000 left to pay on our house though we have $80,000 in equity, $15,000 on corporate credit card, $400 on our personal credit card, we have student loans too. Wife has $120,000 but is halfway through Public Service Loan Forgiveness (5 years left), I have $200,000 in student loans though I plan to start my own non profit in a few years and begin the Public Service Loan Forgiveness after saving up to hopefully close to $1,000,000 which at this rate can be accomplished in about 3 years God willing all stays the same. No kids as of now but we are planning for one within the next 2 years and maybe one more after that. My Financial Planner has advised that even with a minimal monthly contribution to the corporate brokerage account of $100 monthly over the next 15 years, I can reasonably expect another million and begin the FIRE journey at which time hopefully both student loans will have been discharged.

Can I get some analysis on my situation? Am I on a solid path to FIRE and is to reasonable to believe that we can scale back on work in about 2-3 years for about a year or two to be with a baby and still be on track for FIRE in our late thirties to mid forties? Any insight and/or advice is appreciated thank you!

 

[mrfeh]

There are too many variable to provide a timeline. At only 28/29, it's not clear to me why you'd want to.

Pay off your debts. Save as much as you can. Reevaluate in 5-10 years.

 

[KCGeezer]

There are too many variable to provide a timeline. At only 28/29, it's not clear to me why you'd want to.

Pay off your debts. Save as much as you can. Reevaluate in 5-10 years.

And don’t forget to enjoy life while you’re doing this.

 

[stepford]

Just doing the math here... Your current assets are ~$300K, combined income is $265K and you expect to have $1M saved within 3 years? I'm not sure how this works.

 

[bw5972]

I applaud your efforts but would be careful of counting on the debt forgiveness 100% in your success strategy. The final word is not yet in on the reliability of the program.


Student Loan Forgiveness Program Rejects 99% Of Applicantshttps://www.forbes.com/sites/zackfr...rvice-loan-forgiveness-rejected/#14d2a2791824

 

[joylesshusband]

I own my own business

Don't say. And who is the owner?....

Am I on a solid path to FIRE?

Nope.
Your math is way off. As is your mentality.

is to reasonable to believe that we can scale back on work in about 2-3 years for about a year or two to be with a baby and still be on track for FIRE in our late thirties to mid forties?

No.

 

[redduck]

Is post #6 (directly above) an example of how not to respond to a first-time poster who is asking questions about his own situation?

 

[REWahoo]

Posting here purely for amusement.

It's not working.

 

[FIRE hopeful]

Just doing the math here... Your current assets are ~$300K, combined income is $265K and you expect to have $1M saved within 3 years? I'm not sure how this works.

Thank you all for your feedback. What can I be doing differently to FIRE sooner rather than later?? Am I too young to FIRE? And we make $265k annually but we are able to put away roughly $200k-$250k a year so $300k plus $600k over 3 years on the conservative end is how I got that number.

 

[mrfeh]

Thank you all for your feedback. What can I be doing differently to FIRE sooner rather than later?

Read this:

https://www.bogleheads.org/wiki/Bogleheads®_investing_start-up_kit

And spend some time in the boglehead forums.

If you are an MD, you may also be interested in this: https://www.whitecoatinvestor.com/

 

[euro]

And we make $265k annually but we are able to put away roughly $200k-$250k a year so $300k plus $600k over 3 years on the conservative end is how I got that number.

Is that 265k income tax free? Even if it is, are you saying your living expenses are $15-65k per year? Seems like your mortgage is probably more than 15k
Or are you EACH making 265k? Even then it doesn’t add up

 

[Rotaflex]

。。but we are able to put away roughly $200k-$250k a year so $300k plus $600k over 3 years on the conservative end is how I got that number.

Might want to take a look at the past year if saving rate is >200k. Otherwise, there is a risk of over simplifying and missing out expenses including paying all those debts.

 

[kgtest]

Thank you all for your feedback. What can I be doing differently to FIRE sooner rather than later?? Am I too young to FIRE? And we make $265k annually but we are able to put away roughly $200k-$250k a year so $300k plus $600k over 3 years on the conservative end is how I got that number.

Save more? Spend less? That is what I do. Be honest with yourself and your arithmetic.

My plan...1.5-2MM by 50. That needs to last us possibly 40 years.

Read up on SWR, and do an honest budget. You can do it.

 

[Surewhitey]

We were in your shoes back then. 12 years later, sitting pretty with 1.2 & paid for home. 3-4 of those years enjoying the Caribbean life, though. Don't deprive yourself too much IMO. We still have many years of fun ahead of us but have really enjoyed the ride so far.

 

[RenoJay]

The fact that you’re thinking about this in your late 20’s is very admirable. I agree there’s too many variables to give a good opinion but I will add a caution: when I was your age I spent too much time staring at my financial spreadsheet and if the goal on the spreadsheet was to earn “X% return” one year, I found myself making decisions to try to hit that goal. Those decisions essentially amounted to “chasing yield” which meant I took on too much risk. My big picture suggestion is to operate your business in such a way as to ensure your debts are very manageable and to be in a position to capitalize on short term opportunistic investments. I’ve started 7 companies. The first 3 failed, in part from the above described yield-chasing. The next 4 earned many millions, mostly because I learned to get me emotions and actions onto the same page. If you want to PM and chat about entrepreneurship I’d be happy to.

 

[CaliKid]

I'd target FIRE at 50. If things go great maybe it will be 45 and if they go poorly it will be 55. I wouldn't plan on FIRE much before that unless you can live an incredibly frugal lifestyle.

 

[MBAustin]

Welcome and glad you found us now and not 30 years from now! As you know, starting early is key to FIRE. Personally, I would simplify investments to mutual funds/ETFs with the asset allocation you're looking for (probably 70-80% equities at your age and stage). Tracking your spending is key. Kids are not cheap but you can definitely still make FIRE happen if you consistently LBYM. For example, every time we bought a house, it was ½ or less of the price of what we could qualify for a mortgage, and we put at least 20% down. Keep your vehicles for a long time. Cooking instead of eating out/ordering in saves a ton and you'll be healthier to boot. Enjoy cheap/free recreation (parks, hiking, camping, etc.) but don't sweat about the occasional splurge.

We look forward to hearing more about your journey!

 

[gamboolman]

FH....
Well done sir to you and your better half. When ms gamboolgal and I was your age we was making ~$45K in todays dollars vs your $265K....Your on the right path....but it's a journey not a trip...

Now is the time for you to bear down and go to work 7 days a GD week and pile it up. Go to work sick, work the holidays, work vacations, take the job/transfer in bumfkegypt, move to wherever the company needs you......go to the meetings and say the "flavor of the month" mantra and wear the embarrassing tee shirt.....and make a check to support your family.

Babies are coming and you will spend/invest more on them "gifts" than you can fathom...not a bad thing but it is what it is...

About a year after the first baby.... the engine will fall out of the car and a piece of the Space Station will fall down from heaven and destroy your roof, pine beetles will devour your tree's, your attic will be full of bats and the black plague .....and your job will implode and you'll be layed off.....the grand struggle of life.... Wouldn't change a thing....

Aim for age 50 and you'll be ahead of 95% or more of the herd...

Now is the time to embrace the fire and work your asszzzz off to provide for your family sir..... living on love and borrowing on time.....Cowboy the F-Up and go to work every GD day.

FH, well done to you and your wife, well done.... And while this is a couple's decision...no judgement but just sayin....a mother staying home with the babies and being Mom to the family is not a bad thing....it's a personal decision....not right or wrong, good or bad....it's up to the couple....For sure it's a struggle, but thats when you work harder and smarter and earn a pay raise....Cowboy the.....

Thank God every night for that sweet lady that you don't deserve....and do all you can to take care of her and the future babies....and carry a huge amount of life insurance incase you don't come home one day....

Lifes A Dance And You Learn As You Go....
gamboolman....

 

[HI Bill]

...$192,000 in corporate brokerage account

$5,500 in SEP IRA

$14,800 in our Joint Savings Account

$76,000 in Corporate Operating Account.

$3,500 in Wife’s ROTH IRA

Debts: $167,000 left to pay on our house though we have $80,000 in equity, $15,000 on corporate credit card, $400 on our personal credit card, we have student loans too. Wife has $120,000 but is halfway through Public Service Loan Forgiveness (5 years left), I have $200,000 in student loans though I plan to start my own non profit in a few years and begin the Public Service Loan Forgiveness after saving up to hopefully close to $1,000,000 which at this rate can be accomplished in about 3 years God willing all stays the same. No kids as of now but we are planning for one within the next 2 years and maybe one more after that. My Financial Planner has advised that even with a minimal monthly contribution to the corporate brokerage account of $100 monthly over the next 15 years, I can reasonably expect another million and begin the FIRE journey at which time hopefully both student loans will have been discharged.

Can I get some analysis on my situation? Am I on a solid path to FIRE and is to reasonable to believe that we can scale back on work in about 2-3 years for about a year or two to be with a baby and still be on track for FIRE in our late thirties to mid forties? Any insight and/or advice is appreciated thank you!

Welcome!

• Why doesn't your wife use a 401(k) or equivalent? Can't she put away a lot more than the IRA allows?
• Why is your business running a $15K cc debt if you're making so much money? Paying high interest rates to fund a busniness while paying yourself first doesn't make sense if your business is as profitable as stated.
• What's your annual spending rate?
• What's your actual savings rate?
• We are confused about your stated high savings rate vs. your income.
• "My Financial Planner has advised that even with a minimal monthly contribution to the corporate brokerage account of $100 monthly over the next 15 years, I can reasonably expect another million " How does the math work on this, exactly? $1,200 annual * 15 years is $18K, not including potential earnings. Assuming your $192K doubles twice would give your $846K, if there's a linear increase (assuming a doubling every 7 years). Guess you're counting on outsized continued gains on your picks (which may or may not occur).
• How do taxes work on your corporate brokerage account? How will you transfer those $ for your own use, and how much in taxes will you pay? I'm ingorant about such an account, but what are the benefits of having a coporate account over an individual account?

My advice:
Pay down debt.
Increase tax-deferred savings.
See how the loan forgiveness goes, and then adjust your plan accordingly.

Good start, keep going!

 

[flintnational]

Welcome to the forum. With your income and thrift, you will do well. As others have said, at your age it is hard to say when you can reach FIRE. Keep doing what you are doing and you will get there. In my 20's the long range plan was to retire at 55 with savings between X and 1.3X. We retired at 53 with a little less than X and pensions I had not planned on. And, we are likely over funded. While it helps to have a long range plan, things change. At your age, a plan is only a ball park estimate.