35 Year Old Progress

[Bigdawg]

• I cannot contribute anything to my Roth now because my compensation is above the allowed contribution limit. The current money showing in my Roth is from contributions many years ago.

I'm still trying to find other ways to tax shelter some money and/or route more money to my Roth...but so far, I don't see any way to do it with the situation I currently have. Any other tax sheltering ideas would be very welcome.

What Is a Backdoor Roth IRA? | RothIRA.com

Back door ROTH. Look into it. Good luck and congrats on your progress.

 

[BergLust]

What Is a Backdoor Roth IRA? | RothIRA.com



Back door ROTH. Look into it. Good luck and congrats on your progress.

Thanks for the reply. I looked into it about a year ago with my employer and it seems they don’t allow it. If you know another way I’m all ears!!!

 

[BergLust]

Hi All,
Happy New Year! Well, I'm 37 now...and still feel like I'm 25...so I guess that's good! Here is my 2017 year end update! Like many others, 2017 ended up being a very good year. I feel like I've made very good progress executing my long term plan.

Below are my holdings and value now that can be compared to my original post and my second post from May 2015. At the end of my post I have some comments about plans for 2018 and beyond. As always, your comments are more than welcome and very much appreciated!

High Yield Savings (1.30% interest): $69,105

Other Various Savings (<0.04% interest): $28,541

Individual Investment Account: $671,300

Traditional IRA: $0 - Moved money to 401k to facilitate backdoor Roth IRA

Roth IRA: $43,680

Tax-deferred (401K & HSA Investment): $495,500

TOTAL ASSETS: $1,308,126

Additional Comments for 2017:

• I have no debt, I do not own a home; I rent. I own my car.
• I max out my 401K, and my employer matches my contributions at 7% (4% retirement contribution & 3% employer match).
• I started executing a backdoor Roth IRA in 2017. Moved my Traditional IRA money to my 401k first.
• I do have more cash on hand than I want right now, but as you can see from post-to-post that is going down. I'm DCA-ing that into my individual account each month.
• I've taken out the individual possession in the accounts from the table above...was getting too messy. Basically, I have a 3 fund portfolio of low fee and commission-free ETF's in the TD Ameritrade accounts (Individual & Roth). I also have a 3 fund portfolio of low fee mutual funds in my 401K and HSA. I try to keep a 70/20/10 mix of domestic/international/bond.
• I do hold a little bit of F, TSLA, TDOC - for "fun" in the TD Ameritrade accounts.

Here are some thoughts and "resolutions" for 2018:

• Investigate expanding passive income into other places (duplex, etc..)
• Develop ideas/strategy/rules for early entry (aka: startups) investments.
• Get nephew engaged and learning about investments.

Again, thanks for all of your thoughts and feedback! It's been very helpful! Have a wonderful year!

 

[exnavynuke]

BergLust - I just wanted to double-check that you were aware of the change to the commission free ETF list at TDA... since I noticed you were using VTI etc that USED to be on the list but aren't anymore.

 

[BergLust]

BergLust - I just wanted to double-check that you were aware of the change to the commission free ETF list at TDA... since I noticed you were using VTI etc that USED to be on the list but aren't anymore.

Hello exnavynuke. Yep, I am aware. I've changed further purchases of VTI to the somewhat equivalent SPTM and VEU to the somewhat equivalent SPDW. I'm a bit disappointed in TD Ameritrade's decision to discontinue the free Vanguard ETF's.

Thanks!

 

[BergLust]

Hi All,
Well, I suppose it's time for my mid-year update! Life has continued to be good and move right along! I still feel like I'm learning and continuing to make progress.

Below are my holdings and value now...and that can be compared to my original post and my other posts through the years. At the end of my post I have some comments and thoughts for the future. As always, your comments are more than welcome and very much appreciated! Always learning...

High Yield Savings (1.65% interest): $31,043

Other Various Savings (<0.04% interest): $21,734

Individual Investment Account: $759,065

Traditional IRA: $0 - Moved money to 401k to facilitate backdoor Roth IRA

Roth IRA: $47,234

Tax-deferred (401K & HSA Investment): $514,817

TOTAL ASSETS: $1,308,126

Asset Mix:


Current Status Comments:

• I have no debt, I do not own a home; I rent. I own my car.
• I max out my 401K evenly throughout the year, and my employer matches my contributions at 7% (4% retirement contribution & 3% employer match).
• I executed my 2018 backdoor Roth IRA for 2018 in January.
• I continue to have more cash on hand than I want, but as you can see from post-to-post that is going down. I'm DCA-ing that into my individual account each month.
• Overall I have a 3-fund portfolio of low fee and commission-free ETF's in the TD Ameritrade accounts (Individual & Roth). I also have a 3 fund portfolio of low fee mutual funds in my 401K and HSA. I try to keep a 60/30/10 mix of domestic/international/bond. As I add new funds to the 3-fund portfolio in the different accounts I am directing more bonds to my 401k and more international to my individual (taxable) account.
• I did some tax loss harvesting at the beginning of the year which will help when/if I sell some things.
• I do hold a little bit of TSLA, TDOC - for "fun" in the TD Ameritrade accounts.
• I reviewed municipal bonds and I've decided that they are not right for me at this time. Mostly because if I move states in the future it will have an impact on the investment performance.

Comments For The Future:

• I recently opened a business as a sole proprietorship possibly capitalize on some skills from a hobby. I view it as a good opportunity to get my feet wet in a low-risk business. Additionally, this should allow for solo-401k deposits if any income is generated or if I ever need/want to roll other tax-deferred money into another qualified account.
• I continue to look at other passive income opportunities and am currently trying to learn about land investment and determine if it's right for me. Seems like some people have tools and processes to streamline the work. Also am still considering a duplex. I don't necessarily want to be a renter forever.

Again, thanks for all of your thoughts and feedback! It's been very helpful!

 

[BergLust]

Hey All,
It's been about a year since my last post in this thread and wanted to give an update and get some feedback! I've left the value of accounts off of this post simply to reduce workload for me. . And really what is most important for me at this point is asset allocations and tax efficiency. If you could have a look at my situation I would appreciate the continued feedback/thoughts/questions. It's been a great help on this journey!

Current Status Comments:

• I think my cash on hand is now in a better place. 3% of my total portfolio and provides a safety net incase something happens.
• I have expanded into a 'new' asset class REITs. I wanted to have some real estate in my portfolio, but am not in a place in my life to have a physical asset.
• I am targeting a 55/27/10/5/3 mix of domestic/international/bond/RIET/cash. As I add new investment money in the different accounts I am directing more bonds to my 401k and more international to my individual (taxable) account and RIETs into my Roth IRA.
• I did some tax loss harvesting at the beginning of the year which will help when/if I sell some things.
• my sole proprietorship has taken a back seat to some other priorities, but it is still open...just not providing revenue or an avenue to execute a solo-401k.
• continue to hold a little bit of TSLA, TDOC - for "fun" in the taxable account but don't plan to put any more money into the stocks.

Comments For The Future:

• I continue to look at other passive (or semi-passive)income opportunities and am open to ideas to research.
• I am still considering a duplex. I don't necessarily want to be a renter forever and if I choose to exit the corporate life early cash flow will be important.

New Annual Contributions:

• $72,000 Taxable
• $19,000 401k (+5% company match of salary)
• $6000 Roth IRA via backdoor Roth IRA
• $0 HSA Investments in 2019 (have a different program this year)

Current retirement assets (picture below):

 

[BergLust]

Hello All,
I haven't posted an update since June 2019, but I haven't been ignoring my investments! Below is the current status of my investments and I welcome any comments or suggestions!

Current Status Comments:

• I've leaned my mix of assets more towards bonds over the last two years (see the change of +5% bonds from my last post. I am now targeting a 55/22/15/5/3 mix of domestic/international/bond/RIET/cash. As I add new investment money in the different accounts I am directing more bonds to my 401k and more international to my individual (taxable) account and RIETs into my Roth IRA/HSA investment accounts.

• Cash has been right about at target (3%). Although, with "high yield" savings account interest rates being so low, I'm open to other/better liquid investment ideas to park the cash. Thoughts?

• I continue to invest a small percentage of my portfolio in REITs, although I'm below my target. At the moment I'm not disappointed I'm below target, as I'm concerned about what will happen to commercial real estate as a result of the effectiveness of Work From Home, which COVID has highlighted. I still do not own any physical real estate, so the REITs currently fills that asset class.

• I managed to do some big tax loss harvesting (TLH) in March of 2020 which will help whenI sell some things. From a timing perspective, I simply got "lucky" and did the TLH, right when the market hit the bottom in March.

• I continue to hold TSLA, TDOC, but I sold my initial investment value of both in 2020 (took advantage of some of the TLH dollars). Both have grown significantly before I sold the principal value. So, far I'm still hanging on for the ride, but need to decide if I want to take some/all of the gain and get out! I haven't bought any additional "fun money" stocks.

• My sole proprietorship continues to take a back seat in my life. It is still a business...just not providing revenue or an avenue to execute a solo-401k.

Comments For The Future:

• I continue to be open for other passive income opportunities.

• I'm considering less and less to be a landlord. I can't convince myself I want the hassle. I'm occasionally looking at single family homes. I don't necessarily want to be a renter forever.

• Based on flexible retirement planner and firecalc it seems I'm in a position to retire in the next 1-2 years. Important for me is to retire to something! I've still got plenty of energy and would like to contribute to the world.

Emergency funds: 6 months+ in cash in a high yield savings account.
Debt: 0
Tax Filing Status: Single
Federal Tax Bracket: 32 Federal, 0% State (no tax state)
State of Residence: WA
Age: 40
Desired Asset allocation: 55% domestic stocks, 22% international stocks, 15% bonds, 5% REIT, 3% cash
Portfolio Value: $x,xxx,xxx

Current Retirement Assets (Picture Below):


New Annual Contributions:
$72,000 Taxable
$19,500 401k (+4% company match of salary)
$6000 Roth IRA via backdoor Roth IRA
$3000 HSA Investments

That's all for now I think. Any advice or suggestions of things to consider would be much appreciated! Cheers.

 

[ILikeStarTrek]

Hello All,
I haven't posted an update since June 2019, but I haven't been ignoring my investments! Below is the current status of my investments and I welcome any comments or suggestions!

• Based on flexible retirement planner and firecalc it seems I'm in a position to retire in the next 1-2 years. Important for me is to retire to something! I've still got plenty of energy and would like to contribute to the world.

Age: 40

Portfolio Value: $x,xxx,xxx

Looks like you are doing very well! When you first posted in May 2015, I believe you said you were 10 yrs away from retirement. Now just under six years later, your timeline is 1-2 yrs so you have advanced your timeline by 2-3 yrs. That's not surprising considering how well the stock & housing markets have done in the past 6 yrs; but it still is very good on your part for continuing to save.

FWIW, I didn't pass a million dollars of net worth until I was age 50, and you did it in your late 30s. Great job!

You haven't posted anything about your expected retirement expenses, but hopefully you will have those planned by the time you retire. You must be already tracking them to some extent since they are an input to the retirement planners you are using.

I see that you stopped posting your portfolio value since your 2018 post. It was fun to see how your portfolio was growing up until then, but if you no longer wish to post it of course it's your prerogative. The value has obviously been going up since you are contributing a lot and generally the stock and housing markets are still doing well. So like I said at the start, you are doing very well!

 

[bradtreadwell1900]

Congratulations on your progress! I am 37 and have similar interests to yours related to income streams and retirement age. My wife is 33 and is in love with her teaching job (she has no desire to retire anytime soon). Our net worth is around $750k and we earn around $175k per year from two traditional careers, a paid off rental property, and one side venture. We are homeowners. I share your interest in passive income streams and general income diversification.

Currently, I am considering what the next 5-10 years hold for us. We have two young daughters that have not yet started grade school. Ideally, I would like to transition into a career where I am not working during their school breaks. My job is very stable, enjoyable, and challenging without being highly stressful. I daydream about alternative careers that would be even more enjoyable.

How would you decide how to balance contentment with aggressively pursuing financial progress? For example, did you focus on career changes to maximize earning potential with the risk of less desirable/higher stress in the short term? Did you consider sacrificing earning potential to change careers that provide greater satisfaction and freedom sooner?

I see examples of both. On family member has seen his income rise substantially but it required relocating his family every 5 years. I know a family that had modest incomes but travelled extensively with their children from an early age because there careers were in teaching.

 

[BergLust]

Congratulations on your progress! I am 37 and have similar interests to yours related to income streams and retirement age. My wife is 33 and is in love with her teaching job (she has no desire to retire anytime soon). Our net worth is around $750k and we earn around $175k per year from two traditional careers, a paid off rental property, and one side venture. We are homeowners. I share your interest in passive income streams and general income diversification.

Currently, I am considering what the next 5-10 years hold for us. We have two young daughters that have not yet started grade school. Ideally, I would like to transition into a career where I am not working during their school breaks. My job is very stable, enjoyable, and challenging without being highly stressful. I daydream about alternative careers that would be even more enjoyable.

How would you decide how to balance contentment with aggressively pursuing financial progress? For example, did you focus on career changes to maximize earning potential with the risk of less desirable/higher stress in the short term? Did you consider sacrificing earning potential to change careers that provide greater satisfaction and freedom sooner?

I see examples of both. On family member has seen his income rise substantially but it required relocating his family every 5 years. I know a family that had modest incomes but travelled extensively with their children from an early age because there careers were in teaching.

Hi! and sorry for the delay in response. Thanks for the reply and it looks like you're well on your way, also! The rental property and side venture seem like they would offer some nice diversification. And the paid off house must offer some very nice stability for your family. Well done!

Contentment vs aggressively pursuing financial progress: Well, I'm not sure I'm qualified to give that advice! ha! I can simply say in in the beginning of my financial journey I knew very little about investing and diversification. Made a lot of mistakes, learned, and then at about the age of 27(ish?) I decided to get very focused, realized income (and saving/investing that income) was important if I EVER wanted to retire a comfortable life. I talked to people with more experience, made a plan and got to work! I decided to be open for unique opportunities in my profession, which turned out to be good promotion/income decisions. That increased income allowed me to invest more and more in my boring diversified portfolio every year. Those investments, websites/community like EarlyRetirement, a plan/goal, and tools like Flexible Retirement Planner, put me where I am today. I will say that there were certainly some "sacrifices" - long hours, significant international travel, and relocating internationally twice. But, there was also a lot of GREAT personal experiences along the way!

Considering I'm looking to get out of the rat race sooner rather than later, chasing a higher income from work really isn't going to make that big of a difference in my net wealth, long term. If I REALLY wanted to continue the corporate life for a while, I would have a different view....but I really don't have a desire to stay. There is a lot of personal life to experience(as you point out too)! . So, at the moment, I'm focused on doing a great job of what I do...but not looking for very aggressive advancement!

To solidify my decision, I just keep my goals in mind and have some facts to support I'm achieving them in the timeline I have in place. I've realized that at some point, financially speaking, there has to be "enough". More is not necessarily better. .

Would love to hear any thoughts you, or anyone else has, on this topic! Thanks for bringing it up!

 

[Oz investor]

@ BergLust

Comments For The Future:
I continue to be open for other passive income opportunities.
I'm considering less and less to be a landlord. I can't convince myself I want the hassle. I'm occasionally looking at single family homes. I don't necessarily want to be a renter forever.
Based on flexible retirement planner and firecalc it seems I'm in a position to retire in the next 1-2 years. Important for me is to retire to something! I've still got plenty of energy and would like to contribute to the world.


***

yes looks OK

except for the current virus consequences , all that government money being flung about is actually tax-payer money spent prematurely ( before you have paid your share of it )

you may be inline for spectacular opportunities OR lessons that you would rather face at 40 rather than 70

my best advice is be like a sailor ... when the wind changes adjust the sails accordingly

good luck ...being a renter improves flexibility ( others would suggest a house is an asset you can leverage ) there is no one-size-fits-all' answer

a compromise would be a house you could sublet part of it say a couple of rooms for an office , a shed for a workshop .. just suggestions

 

[BergLust]

Congratulations on your progress! I am 37 and have similar interests to yours related to income streams and retirement age. My wife is 33 and is in love with her teaching job (she has no desire to retire anytime soon). Our net worth is around $750k and we earn around $175k per year from two traditional careers, a paid off rental property, and one side venture. We are homeowners. I share your interest in passive income streams and general income diversification.

Currently, I am considering what the next 5-10 years hold for us. We have two young daughters that have not yet started grade school. Ideally, I would like to transition into a career where I am not working during their school breaks. My job is very stable, enjoyable, and challenging without being highly stressful. I daydream about alternative careers that would be even more enjoyable.

How would you decide how to balance contentment with aggressively pursuing financial progress? For example, did you focus on career changes to maximize earning potential with the risk of less desirable/higher stress in the short term? Did you consider sacrificing earning potential to change careers that provide greater satisfaction and freedom sooner?

I see examples of both. On family member has seen his income rise substantially but it required relocating his family every 5 years. I know a family that had modest incomes but travelled extensively with their children from an early age because there careers were in teaching.

I ran across my thread from the past and was curious how you have progressed! Any progress?

 

[BergLust]

Hello All,
My annual update! My asset allocations haven't changed much so I'm not posting a new picture. Below is the current status of my investments and I welcome any comments or suggestions!

Current Status Comments:
Still targeting a 55/22/15/5/3 mix of domestic/international/bond/RIET/cash. As I add new investment money in the different accounts I am directing more bonds to my 401k and more international to my individual (taxable) account and RIETs into my Roth IRA/HSA investment accounts. I'm considering creating a bond ladder, but haven't pulled the trigger on that yet. With current yields, I'm considering TIPS & CDs.
Cash has been right about at target (3%).
I continue to invest a small percentage of my portfolio in REITs, which have taken a nosedive this year.
I did buy a house!...which has some projects that keep me busy. So, I'm focusing some energy on that.
I managed to do some big tax loss harvesting (TLH) a couple times this year....and I used some of my accumulated TLH over the years to offset sale of some shares of TSLA to apply to the down payment of my home.

My sole proprietorship continues to take a back seat in my life. It is still a business...just not providing revenue or an avenue to execute a solo-401k.


Comments For The Future:
I continue to be open for other passive income opportunities.
I'm still in a good retirement position, but of course most of the market is down in 2022....flexible retirement planner and firecalc it seems I'm in a position to retire in the next 1-2 years. Important for me is to retire to something! I've still got plenty of energy and would like to contribute to the world. From a sequence of returns perspective, I'm happy to work through this downturn.

Emergency funds: 6 months+ in cash in a high yield savings account.
Debt: 0
Tax Filing Status: Single
Federal Tax Bracket: 32 Federal, 0% State (no tax state)
State of Residence: WA
Age: 42
Desired Asset allocation: 55% domestic stocks, 22% international stocks, 15% bonds, 5% REIT, 3% cash
Portfolio Value: $x,xxx,xxx