Health Check (30 Years Old)

[recursion49]

Hi everyone,

Just wanted to reach out for some advice from this forum!

Here's my financials as of today:
Cash: $5k
Investments: $150k
Home & Auto: $300k
Auto: $30k
Total Assets: $485k

Mortgage: $225k
Auto Loan: $20k
Credit Card: $0
Total Liabilities: $245k

Net Worth: $240k

Life insurance (me + spouse): 30-year, $1M policy for each for $750/yr

Savings rate: $20k-$25k/annual (401k + taxable + 529 + ESPP)

Allocations:
55% - U.S. Growth
10% - International Large Cap Index
5% - Emerging Markets Index
5% - Gold
25% - U.S. Bond Index

I think we stick to a relatively skinny budget (having slimmed down drastically from our earlier free-spending days). Having hit my 30th birthday not too long, I wanted to check in to see what the forum thinks of our current trajectory. I'm hoping to retire at 45, which is a bit of a stretch at this point but a good longer term goal. My wife is currently a stay-at-home mom, with my two kids (4 and 1), with plans to eventually return to work once the kids are a little older. Are we on the right track?

Another side question I have is, since we started dialing back on our budget, it seems like boredom has become a bigger problem since dining/entertainment had been a significant portion of our spend. Does anyone have the same experience, or maybe some tips? Hobbies are one thing, but can't be hobby-ing endlessly either! I was thinking of maybe suggestions regarding planning short getaways with family to keep costs low while getting tons of fun in the meantime? We live out by coastal Virginia, if it matters!

I look forward to your thoughtful responses!

 

[ckelly78z]

You are ahead of most 30 year olds, and are one of the few that age on this forum giving any hoot about a FI future...good on you.

I suggest outdoor activities like running/hiking/biking/walking to get your physical, and mental health in a good place just like you have on your financial health.

 

[recursion49]

Thank you! I do review statistics on wealth, and I believe that I'm in a pretty above-average spot. Sure doesn't feel like it since we're saving and not spending, but keeping score definitely helps!

Sometimes, it's hard to put things into perspective for me because I've seen people in their 30's on this forum with $500k-$1M net worth. And at the same time, I compare against aggregate statistics online, and it shows that I'm sitting better than average for my age and income. However, I feel like there's a large degree of sampling error since I can't compare against folks who have been FIRE-ing for years, and at the same time, the average isn't really helpful since I believe it's biased on the low end (from headlines about people being unable to meet unexpected $1k expenses, etc.).

 

[NgineER]

I think you are doing great from a 30 year old's perspective.
I can't tell if your retirement in 15 years is reasonable as you don't state income/expenses. Quick rule of thumb is that if you want to retire in 15 years you need to save about 50% of your salary if you expect to spend the same amount in retirement as you do now.

I'd say your bond allocation is way high for your age, I am still about 90% equities in my investment accounts.

 

[Teacher Terry]

You can take your kids to the park and swimming in the summer. Pack a picnic lunch. See what free kids events are happening in your town.

 

[Rianne]

You are in much better shape than we were at 30 (student debt and poor). Typically, on this forum, we base our net worth on the portfolio and not the house and cars. At this point I see your net worth at $155K. Your house will likely increase in value and that would eventually add to your net worth.
When D/H and me talk about our net worth it's only our portfolio, cash bucket, bonds, CD's etc. Read "The Millionaire Next Door" and focus on that lifestyle.

 

[RunningBum]

Hmm...if you're bored with the entertainment/dining cutbacks, with a 4yo and 1yo at home, what does an ER at 45 look like for you? How bored will you be with even more time on your hands, especially because an ER for you at that age would have to stay lean, if it's even possible.

You need to make a prioritization decision. If ER is important to you, you need to figure out how to entertain yourself cheaply, like the suggestions in post 2 & 5. If that's just too boring, maybe your priority is to spend a little more to stay entertained and just defer ER, by quite a bit perhaps.

There certainly is a middle ground. An occasional nice meal out might be more special and something to look forward to than doing it regularly, and only sets you back a little bit. Grilling a nice steak or piece of fish at home can be done for a fraction of the cost of a restaurant. Camping is a short getaway without having to pay for hotels. What about day trips to the beach? How about a season pass to Busch Gardens or Kings Dominion when the kids are just a little bit older? Those are barely more than the cost of a single day--but look for a parking deal too, as BGW parking is now $20.

 

[karen1972]

First congrats, you are way ahead of the game. I looked up my numbers and you are actually exactly where I was at your age, and I retired at 43. Is it doable yes, but lots of things have to work in your favor and depends really on what your final expense budget looks like... same reason in FireCalc you can start with the same # and end up $6M in the hole or $38M to the green, sequence of returns is something one can't predict.

Agree you are too heavy in bonds given age and goals, it will be hard for you to make the kind of return you will need. Just keep at it, your plan is working, it may be exactly 15 years but I'm sure if you stay disciplined you will be enjoying early retirement very soon.

Not sure of your area, here in Raleigh, they have a website for triangleonthecheap.com it lists 10-30 events a day that are free or suggested donation type events from music, movies, dance lessons, yoga, kids crafts, learning a skill, etc plus we have tons of trails for hiking, biking, lots of lakes for swimming or boating (canoes are $2/hr to rent). Hard to be bored here unless you are not trying.

I also volunteer which not only gives back but I often learn something while having a good time.

Usually between the libraries, museums, parks and recreation, there is a ton of stuff plus the local brew pubs etc often have events to try to lure you in like comedy night, free music, food truck rodeos, etc.

Last Friday spent the whole morning drinking coffee and eating Rise biscuits and chicken while taking a tour of a local coffee brewer (all free). That I found via Reddit thread for the local area on free things to do this weekend.

 

[recursion49]

Thank you all for the valuable input! I think the question related to "boredom" might be better resolved by maybe making a better distinction between FI and ER. Maybe what I'm really seeking isn't ER at 45, but rather FI at 45? I enjoy the work that I do, and it pays relatively well, so perhaps there's no rush to get away from it.

I definitely appreciate the suggestions. I will look more into sources like Reddit for additional information on cheap/free events to attend! It's definitely been an adjustment for us, but I'm glad to be on the right track!