28 looking for advice... late start

[chris66]

You're doing great. I see you are still focused on paying of the mortgage. I have to restate what was said a year ago -- maxing out your 401K and other investments is probably the better way to go. But, I understand having no debt can be liberating, and if that's your goal, then that's what you gotta do. It may mean a little longer to your goal. Kids may also change your plans.

I got serious about saving around 28 myself, and retired 20 years later. But, I didn't have kids, and I got uber serious about investing in the past decade during my marriage -- so I was dumping money in during the recession and continuing during the growth. The timing was lucky (the behavior, tho, was because I had learned about investing). DH and I also both had high incomes.

Also, like you did with your spouse, choose your friends wisely, too. It's easier to live simply when you're younger. Your peers aren't raking in the bucks necessarily, and they're still dealing with things like student debt, so even if they aren't LBYM, they still have some constraints on their spending. The pressure to consume to show your status grows as you get older, especially if you hang out with folks sometimes referred to as "aspirationals".

You're definitely on your way! Keep the updates coming. I'm pulling for you

 

[MooreBonds]

I echo everyone else on the mortgage. I have a 30 year at 35%, two years in and I don't plan to retire that loan until maybe the last couple of years.

Because I'm such a nice friend, I'd be willing to refinance your mortgage into a private loan by myself for the ultra low rate of 17%. It'd cut your mortgage payments in HALF!

 

[ExFlyBoy5]

I know this goes against the tide here, but I support you wanting to pay off the mortgage. The math does show that you would make more money by continuing to float the mortgage, but the mental clarity you gain from not having a mortgage is HUGE.

I did this very thing and when the original mortgage deed was mailed to me with the stamp 'canceled', I did a happy dance that can not be replicated. I have it framed and in my office.

Sent from my mobile device so please excuse grammatical errors.

 

[kikechico]

Nice work!

With your focus, you should be able to do it.
I echo everyone else on the mortgage. I have a 30 year at 35%, two years in and I don't plan to retire that loan until maybe the last couple of years. Itemized deductions on it combined with maxed out 401(k) gives me a nice tax reduction.

Consider the Roth IRA for the two of you as well. Tax free money in retirement will be awesome.

Thanks. I think we qualify for the traditional IRA and we are planning on maxing them out at the end of this year. We are also planning on maxing out my wife's HSA next year to add to our stash.

You're doing great. I see you are still focused on paying of the mortgage. I have to restate what was said a year ago -- maxing out your 401K and other investments is probably the better way to go. But, I understand having no debt can be liberating, and if that's your goal, then that's what you gotta do. It may mean a little longer to your goal. Kids may also change your plans.

I got serious about saving around 28 myself, and retired 20 years later. But, I didn't have kids, and I got uber serious about investing in the past decade during my marriage -- so I was dumping money in during the recession and continuing during the growth. The timing was lucky (the behavior, tho, was because I had learned about investing). DH and I also both had high incomes.

Also, like you did with your spouse, choose your friends wisely, too. It's easier to live simply when you're younger. Your peers aren't raking in the bucks necessarily, and they're still dealing with things like student debt, so even if they aren't LBYM, they still have some constraints on their spending. The pressure to consume to show your status grows as you get older, especially if you hang out with folks sometimes referred to as "aspirationals".

You're definitely on your way! Keep the updates coming. I'm pulling for you

thank you. Yeah we are still focusing on paying the mortgage, I just think that even if I end up with less money in the end the peace of mind that paying the mortgage brings is priceless.

Is hard to find people like us; most of my friends spend money left and right. Sometimes it bothers me but I know better. I haven't talk to any of them about my early retirement plans, I think it would make things awkward. We get most of our support from my parents who are frugal.

Sometimes I feel the need to consume... specially fast cars. I always had a fast car and I just recently sold mine (700hp). I feel an empty space and find myself browsing the internet looking at cars all the time. I actually feel that the car made me feel a little happier.... I really enjoyed driving it after work but it was a money pit. I might end up buying a car next year, I will probably buy something used that has all ready deprecated and spend the least money I can. Also I am planning on keeping that same car until I get to FIRE...

I know this goes against the tide here, but I support you wanting to pay off the mortgage. The math does show that you would make more money by continuing to float the mortgage, but the mental clarity you gain from not having a mortgage is HUGE.

I did this very thing and when the original mortgage deed was mailed to me with the stamp 'canceled', I did a happy dance that can not be replicated. I have it framed and in my office.

Sent from my mobile device so please excuse grammatical errors.

haha that's great. Yeah I am after that mental clarity.

Hopefully I can keep working where I am right now and retire before turning 40.

I am glad I found this community it has provided me with a lot of insight on how to achieve FIRE.

sorry for the grammatical errors on post 23... I cannot edit it for some reason.

thanks

 

[kikechico]

Update 1/3/2015

Here is my one year update

Currently we have the following assets:
9.5k cash
14.2K my 401K
10.5K her 401K
150-170K home equity

Debt
24.5k mortgage

So me and my wife decided to max out our 401k for the first time. We been aggressively paying the mortgage and we will be done in December before I turn 30. Our income has increased to 121.5k.

We been tracking our expenses and it seems that we are spending 19k + the mortgage. I still think 30k a year will be plenty and I if everything keeps going the way it is I might be able to retire before turning 40k.

Thanks for everyone's help

Here is a quick end of the year update:

We finally paid off the house .... I send my last payment yesterday . It feels so good, liberating and I was able to do it before I turn 30 later this January.

Investments
Total Investments $48,245.......$24,640 in my 401K

It is crazy that when I started this thread we only have $2k in total investments.

Total Net Worth: $250k

We are still shooting for $700k-1M in investments to retire.

Thanks

 

[Legally_dead]

Great work! We paid off our house too a few years ago (currently 30). As Dave Ramsey says, the grass feels different when you own it.


Sent from my iPhone using Early Retirement Forum

 

[kikechico]

Here is a quick end of the year update:

We finally paid off the house .... I send my last payment yesterday . It feels so good, liberating and I was able to do it before I turn 30 later this January.

Investments
Total Investments $48,245.......$24,640 in my 401K

It is crazy that when I started this thread we only have $2k in total investments.

Total Net Worth: $250k

We are still shooting for $700k-1M in investments to retire.

Thanks

Update.............

We finally broke 100k in investments and we now have a 3 month girl

Investments

Total Investments $101,189

Debt

Total Debt $16,500

Total Net Worth

$322,925

And we have about $4,500 in cash.

I been tracking all our expenses and even with all the baby related expenses (hospital, doctors, a lot of things etc etc) our expenses for the year should be around $31,000-33,000.

 

[Greencheese]

Congrats! Glad to see such progress

 

[amyj05]

Congratulations!!! You're certainly making progress! Keep up the good work!

 

[kikechico]

Here is a quick end of the year update 2014:

We finally paid off the house .... I send my last payment yesterday . It feels so good, liberating and I was able to do it before I turn 30 later this January.

Investments
Total Investments $48,245.......$24,640 in my 401K

It is crazy that when I started this thread we only have $2k in total investments.

Total Net Worth: $250k

We are still shooting for $700k-1M in investments to retire.

Thanks

Here is the end of the year update for 2015

Investments

Total Investments: $114,322. This includes 401K's and IRA's

Debt

Total Debt $15,770

Total Net Worth: $341,91

and I always forget to include the cash which is around $8,000

Expenses for the year were $35k but these includes medical expenses and other expenses for our first child. After subtraction all of those expenses our yearly spending is around $25k.

We are considering retiring to Colombia which is where I am originally from and to live there we only need around $16,000 usd to live large thanks to a strong dollar.

Thanks

 

[kikechico]

Here is the end of the year update for 2016

Investments

Total Investments: $199,831. This includes 401K's and IRA's

Debt

Total Debt $15,984

Total Net Worth: $441,450

Cash around $15,000

Expenses for the year were $41k but this number includes the purchase of as solar system that cost $14,000.

I also purchased a rental property on 12/30 that needs to be fixed up and I have is not included on this end of the year update.

Hopefully 3 more years to go

 

[exnavynuke]

Making good progress! Keep it up!

 

[aaronc879]

What is this ~$15K of debt you have had for over a year? You clearly have the cashflow to pay it off. Is it zero interest? Other than that it looks like you are doing very well.

 

[MDC86]

Rental property, alright! Almost no one mentions on these forums rental properties. Everyone is all about money in the market. I personally prefer assets I can touch and see. I'm the same age as you, have made several foolish decisions. You and your wife have been doing great staying on track. I had my first house payed off at 28 back in 2015. I was mortgage free for only 7 month before I sold it (it was worth 335k) to buy a $650k house because it had the 4 car garage I wanted and was closer to the highway.

Keep up the great work my friend!

 

[ugeauxgirl]

I thought I was the only one excited about crunching my end of the year numbers- I love seeing your progress- you are doing great!

 

[Milton]

What is this ~$15K of debt you have had for over a year? You clearly have the cashflow to pay it off.

I had the same thought / question.

 

[ponyboy]

I wouldnt get so wrapped up in retiring when you're this young. What is it that you want to do so bad that work is such a burden? $1 million to last a lifetime isnt that much to someone who is 34. Are you just assuming the market is going to stay at this pace and keep going north? Rentals arent a bad idea assuming everything goes perfect for you.

 

[kikechico]

Here is the end of the year update for 2016

Investments

Total Investments: $199,831. This includes 401K's and IRA's

Debt

Total Debt $15,984

Total Net Worth: $441,450

Cash around $15,000

Expenses for the year were $41k but this number includes the purchase of as solar system that cost $14,000.

I also purchased a rental property on 12/30 that needs to be fixed up and I have is not included on this end of the year update.

Hopefully 3 more years to go

Updated time..... we finally hit the 250K mark in investments it seems like it took forever

Investments

Total Investments: $251,051. This includes 401K's and IRA's and now after tax accounts

Debt

Total Debt $72,608

Total Net Worth: $551,993

Cash around $10,000

Debt has increased because of the purchase of the rental property. The rental property still not finished. It should be finished in about one or two months; the project was a complete remodel. I will post some pictures of the before and after when I am done. I think the value of the rental on zillow is conservative and I think it should be around 40-50K more that would increase our net worth a good bit but that's ok.

I am going to try to hit 300K in investments by the end of the year but it is going to be hard.

What is this ~$15K of debt you have had for over a year? You clearly have the cashflow to pay it off. Is it zero interest? Other than that it looks like you are doing very well.

The 15k is a car loan an is not zero interest but is very low. I rather buy some stock than pay that one off.

I wouldnt get so wrapped up in retiring when you're this young. What is it that you want to do so bad that work is such a burden? $1 million to last a lifetime isnt that much to someone who is 34. Are you just assuming the market is going to stay at this pace and keep going north? Rentals arent a bad idea assuming everything goes perfect for you.

I enjoy my work but not 40 hours a week. I think 20 hours a week would be perfect but I think that my infield it would be really hard to find a job that is willing to work with a schedule like that one.

The rental cost 47k and I think I will be at 35k in renovations with an after repair value of 140-150k and a possibility to being rented for $950-1100 per month.

As far as the 1 million dollars not being enough we are planning on moving to a low cost of living country which I am from.

 

[Blue Collar Guy]

You might have made bad financial choices in the past, but i would say your on the right track now. I had a lousy financial adviser for over 20 years, ittook me that long to clear my head and make my own moves. You sir are ahead of the game. Best of luck

 

[Markola]

+1. Just avoid unproductive debt and keep going. Have you maxed your 401k savings yet? The sooner you can, the better. DW and I chipped away toward it early on by directing about half of each raise to 401k automatic savings. One day, we got new, higher paying jobs and it was fairly easy to max out at that point. Had we not upgraded houses and cars more than was really necessary, we'd have maxed much sooner. Some things you learn the hard way, though. Good luck!

 

[kikechico]

Update 1/1/2018 good bye 2017

Here is the end of the year update for 2016

Investments

Total Investments: $199,831. This includes 401K's and IRA's

Debt

Total Debt $15,984

Total Net Worth: $441,450

Cash around $15,000

Expenses for the year were $41k but this number includes the purchase of as solar system that cost $14,000.

I also purchased a rental property on 12/30 that needs to be fixed up and I have is not included on this end of the year update.

Hopefully 3 more years to go

Updated time..end of the year 2017... we hit 300K in investments which I though it was going to be hard since most of our cash when into renovating the rental property.

Investments

Total Investments: $300,608. This includes 401K's and IRA's and now after tax accounts

Debt

Total Debt $67,386

Total Net Worth: $599,887 not including cash

Cash around $9,000

So we finish the rental property and its been rented for about 3 months. I end up getting more rent than I though but also end up spending more money than I have planned on the renovation. The total cash return according to my calculation is 19% so I think I did good. Also the property value in mint.com which I use for Net Worth total says that property is worth 101K but I think it is at least worth 140-150k which would bump my Net Worth a decent amount.... but lets just keep it conservative .

We have a baby on the way and we are really excited for this upcoming year. I think when we hit 500K in investments we will start to seriously consider pulling the plug.

 

[kikechico]

Update 1/1/2019 good bye 2018

Updated time..end of the year 2017... we hit 300K in investments which I though it was going to be hard since most of our cash when into renovating the rental property.

Investments

Total Investments: $300,608. This includes 401K's and IRA's and now after tax accounts

Debt

Total Debt $67,386

Total Net Worth: $599,887 not including cash

Cash around $9,000

So we finish the rental property and its been rented for about 3 months. I end up getting more rent than I though but also end up spending more money than I have planned on the renovation. The total cash return according to my calculation is 19% so I think I did good. Also the property value in mint.com which I use for Net Worth total says that property is worth 101K but I think it is at least worth 140-150k which would bump my Net Worth a decent amount.... but lets just keep it conservative .

We have a baby on the way and we are really excited for this upcoming year. I think when we hit 500K in investments we will start to seriously consider pulling the plug.

Our second baby is now 9 months old time flies. We did not hit many of our goals this year and we spent more money than usual. For 2019 we are planning in paying off our rental and staching as much money as we can. We are considering getting a 3rd property but with the higher interest rates we are not sure.

Investments

Total Investments: $344,800. This includes 401K's and IRA's and after tax accounts

Debt

Total Debt $43,783

Total Net Worth: $722,800 not including cash

Cash around $14,000

So it wasn't a great year even thought it shows that our net worth increased by $122,000. Most of the increase comes from Zillow increasing the property value on our rental and only $44000 come from the increase in investments. We are still far from $500,000 in investments and this market is not helping either. I hope we make into the $400,000s in 2019. I don't think we will be able to retire when I turn 35 I will turn 34 this year.

 

[targatom2019]

You are doing a fairly good job for your age but I highly recommend at least save enough in the kid's 529 plan and finish paying off the house before thinking about retirement. The best you can do as a parent is to give your kids a leg up in life with free education.

 

[kikechico]

Update 01/01/2020 goodbye 2019

Our second baby is now 9 months old time flies. We did not hit many of our goals this year and we spent more money than usual. For 2019 we are planning in paying off our rental and staching as much money as we can. We are considering getting a 3rd property but with the higher interest rates we are not sure.

Investments

Total Investments: $344,800. This includes 401K's and IRA's and after tax accounts

Debt

Total Debt $43,783

Total Net Worth: $722,800 not including cash

Cash around $14,000

So it wasn't a great year even thought it shows that our net worth increased by $122,000. Most of the increase comes from Zillow increasing the property value on our rental and only $44000 come from the increase in investments. We are still far from $500,000 in investments and this market is not helping either. I hope we make into the $400,000s in 2019. I don't think we will be able to retire when I turn 35 I will turn 34 this year.

What an insane end of the year money wise. I never thought the our retirements would hit 500k so quickly. 2019 was a really difficult year personally, my grandmother passed away, my father almost died, and other stuff.... my wife and kids are doing great and we are looking forward to 2020 and so glad 2019 is gone.

Investments

Total Investments: $504,000. This includes 401K's and IRA's and now after tax accounts

Debt

Total Debt $4000

Total Net Worth: $961,000 not including cash

Cash around $4,000

Our net worth increase comes from the increase in investments and increase of the Zillow value of our rental house from 166k to 224k. We paid off our rental house and I am not sure on what to invest this year.

 

[pacergal]

My sympathies on the loss of your Grandmother.

Looks like you are doing really well. After maxing out 401 and IRA, I would continue to plow money into after tax accounts. Do you have 529 accounts for your children? That is another option to consider.