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How am I doing? Age 33 status check
Old 07-09-2018, 02:03 PM   #1
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How am I doing? Age 33 status check

Hello Everyone,

I am a new member on ER.org, but have been a long time saver. My journey started when I discovered about personal finance at 27, but the saving really started when my income increased at 29. I've saved enough to purchase my 1st investment property (live + rent out 2 rooms) 2 years ago at 31.

I think and talk about FIRE with my bf all the time, but he is not too interested... yet .
So I'm really glad I found this forum!

Currently, I want to buy another investment property but feel like I can't save fast enough. With the goal to retire at 40 and travel the world, I feel that I am behind... plus being burned out at my day job doesn't help either.

Here's my financial breakdown. Would love to know how I am doing?
I'd also would love to hear some advise on how you keep yourself motivated.


Age: 33
Salary: $71,000 (before tax)

Savings: $1400
Emergency Fund: $22.5k
Credit: $1278 (pay off at the end of the month)
Stock: $29k
401k: $31.5k (16% pre-tax income)
RothIRA: $80k
REI Fund: $23k
House: $150,000 ($64k loan balance)

Total Net: $272k

Thanks, everyone!
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Old 07-09-2018, 03:56 PM   #2
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Welcome. Those numbers look quite good, maybe not on pace to FIRE by 40 but perhaps not too much later.
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Old 07-10-2018, 07:43 AM   #3
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Quote:
Originally Posted by ef2025 View Post
Hello Everyone,

I am a new member on ER.org, but have been a long time saver. My journey started when I discovered about personal finance at 27, but the saving really started when my income increased at 29. I've saved enough to purchase my 1st investment property (live + rent out 2 rooms) 2 years ago at 31.

I think and talk about FIRE with my bf all the time, but he is not too interested... yet .
So I'm really glad I found this forum!

Currently, I want to buy another investment property but feel like I can't save fast enough. With the goal to retire at 40 and travel the world, I feel that I am behind... plus being burned out at my day job doesn't help either.

Here's my financial breakdown. Would love to know how I am doing?
I'd also would love to hear some advise on how you keep yourself motivated.


Age: 33
Salary: $71,000 (before tax)

Savings: $1400
Emergency Fund: $22.5k
Credit: $1278 (pay off at the end of the month)
Stock: $29k
401k: $31.5k (16% pre-tax income)
RothIRA: $80k
REI Fund: $23k
House: $150,000 ($64k loan balance)

Total Net: $272k

Thanks, everyone!
Honestly, it's good that you've got a nice amount of assets for your age. However, "how you're doing" with a goal to FIRE at 40 is a question that can't be answered without knowing how much you're spending, how the rental income is, etc. Assets are only one part of the equation. How fast you're adding to them and how much you'll need to take from them when you retire are equally, if not more, important in determining if you're on track to meet that goal.

As for motivation, I remind myself of what I WANT to be doing and can't because I'm still working and that helps motivate me to save. Also, I set short-term goals (try to save $XX this year, etc) that I can concentrate on accomplishing on the way to FIRE.
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Old 07-10-2018, 07:48 AM   #4
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You are ahead of most of your peers which is great. However retiring at 40 is young. I hope it works out how you want but a lot of stuff can happen that changes plans. Don't be upset if it's 45 or even really old like 50. You would still be doing much better than most! Keep up the good work!
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Old 07-10-2018, 08:28 AM   #5
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Nice work so far.

You are doing very well having accumulated that nest egg, but without knowing what percentage of your salary you are saving it is hard to know whether 40 is possible...

By ducking out at 40, you are not getting much help at all from the power of compounding.

One option for you could be semi-ERing at 40, by finding a gig/hobby you enjoy that makes enough money part time to cover your living expenses, meanwhile your nest egg continues to compound to the amount you need to be able to pull out 3-3.5% annually for a full ER.
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Old 07-10-2018, 11:00 AM   #6
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Originally Posted by NgineER View Post
Nice work so far.

You are doing very well having accumulated that nest egg, but without knowing what percentage of your salary you are saving it is hard to know whether 40 is possible...

By ducking out at 40, you are not getting much help at all from the power of compounding.

One option for you could be semi-ERing at 40, by finding a gig/hobby you enjoy that makes enough money part time to cover your living expenses, meanwhile your nest egg continues to compound to the amount you need to be able to pull out 3-3.5% annually for a full ER.
Thanks everyone for the great tips and encouragements!

@exnavynuke
>As for motivation, I remind myself of what I WANT to be doing and can't because I'm still working and that helps motivate me >to save. Also, I set short-term goals (try to save $XX this year, etc) that I can concentrate on accomplishing on the way to FIRE.
I love this!!


To clarify, when I say retire by 40, I have more of a "half-retirement" in mind. I want to reach to a point where I can do something I love (real estate, teach, etc.) without having to worry about the pay. With my personality, I'd get bored not feeling productive, so I would still definitely be doing something. I would love to have the freedom to "choose to" work, instead of "have to" work.

I know it will be a while until I can dig into my retirement funds if I do retire at 40, so I am planning to have a good amount of cash reserve and liquid asset before I am fired.

Here's average monthly breakdown
Including rental income but minus taxes

Saving 40% ($1820)
Spending 17% (~ $800)
Mortgage 44% ($2000) (mortgage to be paid off by March 2021)

No other debts with a paid off car

Using the 4% rule, it seems like I only need $240,000 ($9600 x 25) to retire, but I've made a goal of $1M to have some room to breathe. Base on my current situation, I've reached 19% of my goal with out counting my house, and 27% with the house.
But of course, if my income doesn't increase, I'd need to wait until I'm 50 to retire

I am still tweaking my plan as I go along so hopefully I can perfect the plan and make it more comprehensive. Of course, I do know that I'll probably do need to make plans to have a family and prepare for medical care when I get older. So I guess it's good that I am planning right now

Something completely off topic, but outside the regular spending, I am gradually fixing up the house to make it more appealing to renters. One of my goals is to rent out the whole house, while I purchase and live in another. So it's discouraging to see the repairs eating into my REI fund. (The joy of home ownership ) I always feel that money is hard to earn but very easy to spend! lol I do hope 1 day I will come to adapt the "abundance" mindset.
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Old 07-10-2018, 02:15 PM   #7
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Originally Posted by ef2025 View Post
Using the 4% rule, it seems like I only need $240,000 ($9600 x 25) to retire, but I've made a goal of $1M to have some room to breathe. Base on my current situation, I've reached 19% of my goal with out counting my house, and 27% with the house.
But of course, if my income doesn't increase, I'd need to wait until I'm 50 to retire
You are going to live on $800 per month forever? I think we'd need confirmation that you can afford health insurance, property taxes, food, car expenses, emergency fund, car fund (next car), telephone, etc. Unbelievably low expenses. $1M is more likely closer....I must be missing something. Don't count the house...it's only a retirement asset if you take out a reverse mortgage eventually, but at age 40, it won't pay any bills.
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Old 07-10-2018, 04:36 PM   #8
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Originally Posted by ef2025 View Post
To clarify, when I say retire by 40, I have more of a "half-retirement" in mind. I want to reach to a point where I can do something I love (real estate, teach, etc.) without having to worry about the pay. With my personality, I'd get bored not feeling productive, so I would still definitely be doing something. I would love to have the freedom to "choose to" work, instead of "have to" work.
This is the FI portion of FIRE, which has been what I'm striving for. I'm not at the point where I never have to work, but last year's 11 months of job search was pretty painless, my net worth was increasing over the time period despite having to tap into my investments to fund life. Being able to take the time to find work you want to do next is great. It seems like you are certainly headed in the right direction to be able to cover a lot of your expenses from your investments by then given your savings rate.
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Old 07-10-2018, 05:55 PM   #9
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I can’t add much to the others’ assessments, but I will suggest to put a LOT of energy into purchasing your next property(ies) carefully. It’s so easy to make mistakes in real estate (trust me on that one). Inspection by someone who is very detailed and conservative, researching the rental market, pricing out the repairs and improvements beforehand, accounting for vacancies and turnover costs. Look long and hard at the neighborhood to be sure it’s going up, not down. Be picky about tenants (but know the discrimination laws). It’s a great investment when it’s going well, but it can go south easily.

Congratulations at being dedicated to this so young! You’ll be happier when the work you do is your choosing!
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Old 07-11-2018, 08:05 AM   #10
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I know it will be a while until I can dig into my retirement funds if I do retire at 40, so I am planning to have a good amount of cash reserve and liquid asset before I am fired.
I find that this is so often misunderstood - there are several avenues to dig into your retirement funds - especially when you are a really early retiree that can get by on low expenses. Roth conversion ladders etc. (Check out madfientist.com) This IMO is the best way to pay reduce taxes both pre-ER and in ER.

If you do want to add more properties to your income property portfolio, then it would be really good to also build up a nice cash reserve so that you have more money for down payments.
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Old 07-11-2018, 11:24 AM   #11
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You are going to live on $800 per month forever? I think we'd need confirmation that you can afford health insurance, property taxes, food, car expenses, emergency fund, car fund (next car), telephone, etc. Unbelievably low expenses. $1M is more likely closer....I must be missing something. Don't count the house...it's only a retirement asset if you take out a reverse mortgage eventually, but at age 40, it won't pay any bills.
You're definitely right! I am being unbelievably frugal (and sometimes just down right cheap) keeping the expense under $800. I am going all in trying to pay off the house in 3 years - $2000/month. So after that, I'd have more disposable/savable income. (I just hate being in debt and paying $300 mortgage interest every month!)

I totally get that I need to account for health insurance, property tax, and other expenses when I don't work full time anymore. So I will look into that and redo my plan.

Part of my investment actually includes a car fund of $16k in Betterment and slowly increasing. My current car is a 2011 Toyota @ about 95,000 miles. Figure it would still be a few years until I need another car. Maybe I could turn it into and asset and drive for Uber or Postmate, and retire it sooner. Then I can get what I really want - a hatchback or crossover
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Old 07-12-2018, 09:01 AM   #12
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I find that this is so often misunderstood - there are several avenues to dig into your retirement funds - especially when you are a really early retiree that can get by on low expenses. Roth conversion ladders etc. (Check out madfientist.com) This IMO is the best way to pay reduce taxes both pre-ER and in ER.

If you do want to add more properties to your income property portfolio, then it would be really good to also build up a nice cash reserve so that you have more money for down payments.
Thanks NgineER, this is definitely a good read.
https://www.madfientist.com/how-to-a...t-funds-early/


One good thing though, my thinking was on board with the MadFientist all along, continuing to contribute to my pre-tax retirement plans. I am maxing out my RothIRA, and putting in 16% of my gross income to 401k. My goal is to continue to increase my income until I can max out both my RothIRA & 401k ($18,500 now for 2018).

Currently I am contributing to my retirement accounts (IRA & 401k), investing in stocks/bonds (Vanguard ETFs, Betterment, Robinhood), and REI funds. I guess because I am spread so thin that I don't feel my savings increase fast enough. Since there's is only so much I can save with my current income, I guess the next step really is to increase what I bring in.
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Old 07-12-2018, 01:29 PM   #13
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Yes-bumping your income should be a high priority early on.
Once you max out your 401k and Roth IRA you should consider contributing to the after tax 401k if your company allows it. It allows you to contribute above and beyond the $18,500 limit and it can be rolled over to a Roth IRA. This after tax contribution is not always allowed however...
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Old 07-18-2018, 12:20 AM   #14
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Hello Everyone,

...

I think and talk about FIRE with my bf all the time, but he is not too interested... yet .

...
Ditch the boyfriend.

Sorry to sound so negative, but I'm not joking. Even if you do succeed with your financial plan, you are not being helped by your partner, and achieving your goal will either take you longer than it would if you had help (during which time you will build resentment at going it alone) or worse you will actually be drained financially by this person at some point because they are not preparing for their own financial independence (or helping you with yours) and will always be an anchor weighing you down.

Assuming your boyfriend is similar in age to you, trying to change his financial / work habits is futile at this stage. You can try, go for it, but it's most likely a fool's errand. Being in a relationship with someone who 'is not too interested' in early retirement or financial independence in their 30's means that you can never be either. The clock is ticking. What will you do, start going on vacations alone when you approach your goal? That's great for the relationship...

So I posit this financial question to you: How much is this relationship worth to you? Seems to me like you need a better team mate in life.

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Old 07-18-2018, 04:38 AM   #15
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I think we'd need confirmation that you can afford health insurance, property taxes, food, car expenses, emergency fund, car fund (next car), telephone, etc. Don't count the house...it's only a retirement asset if you take out a reverse mortgage eventually, but at age 40, it won't pay any bills.
You replied to this, but underestimating expenses is so dangerous that I want to point it out again. Medical will get to be very significant as you age. Also, a very early RE should not count on a 4% WR. It was not meant for that. Maybe 3%.
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Old 07-18-2018, 05:26 AM   #16
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Will you be have enough credits to be eligible for SS and is this figuring in to your future income/spending?

Great job so far!
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Old 07-18-2018, 10:26 AM   #17
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The poster is 33? So she has 7 years to figure it out. If she realizes she overlooked something she has until she quits to keep working and resolve it.

As for different goals, plenty of couples have a stay at home spouse and work out just fine. If she can afford to retire and he wants to keep working - I donít see a problem. Just like any relationship (has nothing specific to do with FIRE) if one persons expects more from the other than they are willing/comfortable giving (money, time, affection, etc) that spells out difficulty. I canít say money differences with your retirement funds will be different than money differences with earned income.

You really need to focus on increased income. You havent addressed kids and life doesnít get cheaper. Living cheap may be fine when youíre young but it is hard (for most people) to accurately predict goals and wants 20-40 years out. Stay flexible.
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