BigMoneyJim
Thinks s/he gets paid by the post
Thanks to Dory36--also known as Cap'n Bill--for creating this Young Dreamers' forum!
Several recent--and some not so recent--posters are interested in FI/RE but have a number of years before reaching retirement. Here we can discuss some of the things that those closer to or into retirement don't like, such as the dreaded words "work", "job", "career" and "debt".
I've probably described myself at least once or twice in these forums already, but here goes again for the Young Dreamers' forum:
I'm 33, never been married and have no kids, but I think it's fairly likely I'll marry and have kids in the future, although I don't have any potential wives at the moment. I feel lucky more than smart that I started contributing the maximum allowable percentage to my 401(k) when I was 21.
I say lucky because I really didn't understand it all; my boss had me watch a video about benefits, and there was a graph comparing two hypothetical people. I forget the exact numbers, but one person contributed $x per paycheck into his 401(k) starting at age 25 and stopping at age 35. The second person contributed the same amount starting at age 35 and continuing until retirement. Both retired at age 60, but person 1 who only contributed for 10 years had two or three times as much money as person 2! That was enough for me, I figured I'd understand later it and thank myself later, and I was right.
In my early twenties I continued working part time and going to college part time. I ate out frequently, bought toys but always had enough money. I tried saving, but every time I saved $1000 I would spend a big chunk of it. I got a credit card just "to build up credit" and sometimes bought things and carried a little balance.
As I became a professional in my mid twenties I earned more and more, but I spent more and more, also. In fact the more I made the less disposable cash I had. My credit rating and credit card debt also increased. I got a nicer apartment and a nearly-new truck, and suddenly I had to start watching what I spent on a semimonthly basis because I had no spare money!
I turned 30, burned out in my job and quit to join a start-up company with big ideas and stock options. It quickly went out of business. I had a few thousand dollars in cash and a few more thousand in debt, but I thought I'd take a couple of months off before searching for work again.
Naturally my industry--IT--crashed and I had trouble finding a job after running out of cash, and I more than doubled my debt keeping up with my credit card payments and truck payments while looking for work.
During this time I read several personal finance books because I knew I had to change. I balanced my 401(k)/Rollover IRA to my liking with my newfound knowledge. I found a finance web site with many message forums, among which I found the Retire Early Home Page forum and site which planted the idea that I don't have to work until 62 (or 67 for us young'uns I think) to retire. I liked that idea!
A desperation retail job and another shaky startup and 18 months later I went back to the company I quit when I turned 30. I had to move to a different state, but they made the salary worth my while. But I bought an older, smaller car and sold the truck. I rented a fairly nice but small and reasonable apartment. I reduced my spending a fair amount (but still have fun) and started paying off the debt aggresively while still contributing some to my 401(k).
I was tempted more than once to cash out a large portion of the 401(k)/IRA to pay off my debts, but each time I did the calculations the tax penalties weren't worth it, and I was afraid I'd fall into my old spending habits if I took the 'easy' way out.
As it stands now I'll have the credit card debt paid off by June 2004 if nothing unexpected happens. I'll still owe on the car, but it's an interest-free loan from a relative.
I haven't been debt-free and financially smart before. I look forward to it. I'm planning to rapidly build up several months of living expenses in a money market mutual fund account at Vanguard. I'll also do some long term investing both tax-deferred and in non-shelted accounts. I like Vanguard mutual funds a lot, but I may try to pick some individual stocks someday. I'll also have between 5% and 20% in bond funds. I've been nearly 100% equities so far but am slowly getting a little more conservative.
I haven't started doing any calculations yet about how far from retirement I might be, but I suspect it's about 15 years. Maybe 10, maybe 20. I really need to be debt-free for a few months before I really know what my savings rates will be. Then again I might get married and that could throw a wrench into the works.
I don't expect everyone to post their life financial stories, but I thought posting mine might inspire some discussion.
_________________________________________________(Edited to change "my own spending habits" to "my old spending habits"...was a typo)
Several recent--and some not so recent--posters are interested in FI/RE but have a number of years before reaching retirement. Here we can discuss some of the things that those closer to or into retirement don't like, such as the dreaded words "work", "job", "career" and "debt".
I've probably described myself at least once or twice in these forums already, but here goes again for the Young Dreamers' forum:
I'm 33, never been married and have no kids, but I think it's fairly likely I'll marry and have kids in the future, although I don't have any potential wives at the moment. I feel lucky more than smart that I started contributing the maximum allowable percentage to my 401(k) when I was 21.
I say lucky because I really didn't understand it all; my boss had me watch a video about benefits, and there was a graph comparing two hypothetical people. I forget the exact numbers, but one person contributed $x per paycheck into his 401(k) starting at age 25 and stopping at age 35. The second person contributed the same amount starting at age 35 and continuing until retirement. Both retired at age 60, but person 1 who only contributed for 10 years had two or three times as much money as person 2! That was enough for me, I figured I'd understand later it and thank myself later, and I was right.
In my early twenties I continued working part time and going to college part time. I ate out frequently, bought toys but always had enough money. I tried saving, but every time I saved $1000 I would spend a big chunk of it. I got a credit card just "to build up credit" and sometimes bought things and carried a little balance.
As I became a professional in my mid twenties I earned more and more, but I spent more and more, also. In fact the more I made the less disposable cash I had. My credit rating and credit card debt also increased. I got a nicer apartment and a nearly-new truck, and suddenly I had to start watching what I spent on a semimonthly basis because I had no spare money!
I turned 30, burned out in my job and quit to join a start-up company with big ideas and stock options. It quickly went out of business. I had a few thousand dollars in cash and a few more thousand in debt, but I thought I'd take a couple of months off before searching for work again.
Naturally my industry--IT--crashed and I had trouble finding a job after running out of cash, and I more than doubled my debt keeping up with my credit card payments and truck payments while looking for work.
During this time I read several personal finance books because I knew I had to change. I balanced my 401(k)/Rollover IRA to my liking with my newfound knowledge. I found a finance web site with many message forums, among which I found the Retire Early Home Page forum and site which planted the idea that I don't have to work until 62 (or 67 for us young'uns I think) to retire. I liked that idea!
A desperation retail job and another shaky startup and 18 months later I went back to the company I quit when I turned 30. I had to move to a different state, but they made the salary worth my while. But I bought an older, smaller car and sold the truck. I rented a fairly nice but small and reasonable apartment. I reduced my spending a fair amount (but still have fun) and started paying off the debt aggresively while still contributing some to my 401(k).
I was tempted more than once to cash out a large portion of the 401(k)/IRA to pay off my debts, but each time I did the calculations the tax penalties weren't worth it, and I was afraid I'd fall into my old spending habits if I took the 'easy' way out.
As it stands now I'll have the credit card debt paid off by June 2004 if nothing unexpected happens. I'll still owe on the car, but it's an interest-free loan from a relative.
I haven't been debt-free and financially smart before. I look forward to it. I'm planning to rapidly build up several months of living expenses in a money market mutual fund account at Vanguard. I'll also do some long term investing both tax-deferred and in non-shelted accounts. I like Vanguard mutual funds a lot, but I may try to pick some individual stocks someday. I'll also have between 5% and 20% in bond funds. I've been nearly 100% equities so far but am slowly getting a little more conservative.
I haven't started doing any calculations yet about how far from retirement I might be, but I suspect it's about 15 years. Maybe 10, maybe 20. I really need to be debt-free for a few months before I really know what my savings rates will be. Then again I might get married and that could throw a wrench into the works.
I don't expect everyone to post their life financial stories, but I thought posting mine might inspire some discussion.
_________________________________________________(Edited to change "my own spending habits" to "my old spending habits"...was a typo)
