How am I doing?

[HornedToad10]

I wasn't 100% clear what your yearly savings were. 25% of yearly salary including employer match?

Alot of your networth is in cars, so hoping you're done with cars for awhile. The one other comment is that your rent seems pretty high for renting (if a mortgage was 25% then it was fine).

Overall I'd say you're doing very well though, just keep going.

[myself]

Quote:

Originally Posted by HornedToad10 I wasn't 100% clear what your yearly savings were. 25% of yearly salary including employer match? Alot of your networth is in cars, so hoping you're done with cars for awhile. The one other comment is that your rent seems pretty high for renting (if a mortgage was 25% then it was fine). Overall I'd say you're doing very well though, just keep going.

Did you by chance notice the OPs message:
Cash - $16,000 (my emergency fund plus a couple extra thousand)
401k - $25,000 (contributing 6% and 100% of that is being matched)
Roth - $8,000 (contributing 5k starting this year)
Mutual Funds - $5,000 (will be contributing annually starting next year. Contribution amount will be all the cash I have after Roth and 401k besides my emergency fund of 12k, probably around 5% of gross income)
Cars - $40,000 (a classic worth 30k and a daily driver worth 10k)

So, I'd say about 57% of the OPs net worth is outside of the cars.
And I don't think it's abnormal for rent to be $1,250/month in certain areas, especially in the major metropolitan areas.

[HornedToad10]

Quote:

Originally Posted by myself Did you by chance notice the OPs message: Cash - $16,000 (my emergency fund plus a couple extra thousand) 401k - $25,000 (contributing 6% and 100% of that is being matched) Roth - $8,000 (contributing 5k starting this year) Mutual Funds - $5,000 (will be contributing annually starting next year. Contribution amount will be all the cash I have after Roth and 401k besides my emergency fund of 12k, probably around 5% of gross income) Cars - $40,000 (a classic worth 30k and a daily driver worth 10k) So, I'd say about 57% of the OPs net worth is outside of the cars. And I don't think it's abnormal for rent to be $1,250/month in certain areas, especially in the major metropolitan areas.

Yes I did notice, but didn't bother to do the calculation on it at the time. Looks like around ~15% of salary not counting employer match and the hoped for after tax contribution to start next year. That's certainly very good, but it's always worthwhile to encourage to do more.

Let's phrase the net worth the other way. 43% of OP net worth is in cars. That's alot. It'll clearly go down as he keeps saving, but I wanted to encourage him to not get too car crazy. The 10k commuter will depreciate and per my understanding the classic will generally hold it's value or slightly appreciate. It probably won't appreciate as much as investments though and is more just stable. I'd say the same thing if 30-43% of someone's net worth was in antique coins, classic magic trading cards, or anything else. It's fine to do it if it's important to you, just be aware of the tradeoffs and try to control going overboard on something you love that has an economic costs. E.g. I'd say it's a pretty safe bet that the $30k would be worth (much) more if invested in a diversified portfolio vs. the classic car. But if it's important and gives personal enjoyment, then that's an important consideration.

$1250 rent is probably fine, but it's always easy to justify more and nicer and I don't know where he lives other than the midwest and that tends to be cheaper. Although re-reading it the rent is probably less than 1250 since it's 1/4 of takehome. $1250 would be 1/4 of gross. Who knows, there might be opportunity to have a friend as a roommate or something depending on priorities. If you can control the cost of cars and homes, then everything else becomes much easier.

[DeborahB]

Quote:

Originally Posted by myself I don't think it's abnormal for rent to be $1,250/month in certain areas, especially in the major metropolitan areas.

OP said rent was about 25% of take home pay - 1250 is 25% of gross. So his rent is considerably lower than that.

Anyhow, I think you're doing fine. Even saving at all at your age is great - not many do.

I wouldn't count the cars in your net worth in any way.

Other than that... You are assuming you will have this job forever. That's less likely than it used to be, so I wouldn't count on the pension. You should find out when you are vested in the company match on your 401k - you can generally remove that (and your contributions) and roll it into a self-directed IRA if you leave this job. That will give you some investment options your 401k probably doesn't provide.

Maxing out your 401k (not just enough to make the company match), maxing out a Roth IRA, and investing as much as possible of what's left is definitely the way to go. I just worry that you are depending on the pension.

It sounds like you are saving as much as possible. If you are also living relatively frugally (but comfortably) - minimize Starbucks and eating out!! - you'll have a much better idea of how you're doing in another 5 or 10 years.

Now - at a young age - is a good time to be invested in equities and get as much return on your money as possible. You have a lot of time for the money to grow. You can afford to take some investment "risk" because the stocks have time to recover from market fluctuations and price fluctuations.

I'm less risk-averse than many on this forum, but make sure the return on your mutual funds is good. IMO the management fee is irrelevant - it's the overall return that matters, unless you are in an S&P index fund or something like that. If it's a managed fund, diversify and look for good returns.

You're doing great! Oh... don't forget to factor in the potential mate/children/house...

[veremchuka]

wow you are doing great! however, i would NOT count on that pension it is 25+ years out and a lot of things can happen between now and then.... a real lot.

also i would not count those cars as anything but an expense. cars are not investments unless you buy a barrett-jackson car restored to 100% condition that is highly desirable today. but what about 5 or 10 years from now? cars that were hot just 10 years ago, prior to 9/11, have had the bottom fall out as boomers now have the bucks and they want cars from THEIR youth not their parent's! a car that cost $95,000 to restore and you buy it well for say $50,000 may be an investment. trust me cars are not an investment unless you can buy those rare cars that 99.99% of the population couldn't afford if they took their nest egg's worth at age 65 and cashed it in to buy that car. we're talking cars that cost as much as several houses!

keep saving as much as you can and lbym that's how i retired early and i'm sure most folks here as well.