jclarksnakes
Full time employment: Posting here.
- Joined
- Jun 2, 2006
- Messages
- 927
$1M by age 37 would be a great achievement but probably not enough to safely retire unless you can live very cheaply.
$1M by age 37 would be a great achievement but probably not enough to safely retire unless you can live very cheaply.
You sound like your spending reflects your values, not someone else's expectations. If you're happy then it's "frugal" or happy living. If it's painful then it's deprivation.- No, I don't feel utterly deprived currently. I travel a decent amount, I eat out, and I enjoy my hobbies. The only potential deprivation is that I drive an older car; I've thought about getting something newer, but I think it would just be because I feel like I should rather than actually caring about it.
- Single and no kids. I'm not sure what will happen in the future.
More & more it does feel that I'm on the right path towards very early FI. Obviously the market will drive some of what happens, but based on my current saving it seems entirely possible that I'll hit $1M by around age 37, and I don't expect my spending to change drastically between now and then.
Interestingly, though, when I think about my spending 10-20 years down the line, I typically imagine myself spending in the $75k/year range as opposed to the current $30-40k/year range. I'm not sure if this is anticipation of having kids in the future, worries about health insurance, or just a miscalculation on my part. As a result, I don't feel confident that my savings will signify true FI in the next 5-6 years.
If you can cover expenses and a couple pts for inflation, 1M is fine.... We live quite well down here or most states on $35-40k...$30k in Mexico is high on the carnitas.
Now to get to the point: Since my spending runs under $3k/month and I'm already maxing out 401ks and IRAs, I find myself saving another ~40-50k/year in taxable accounts. Mind you, this level of saving is a somewhat recent development for me, but it appears to be something I'll be able to continue going forward. I expect another significant raise some time this year, which will only solidify my ability to keep this up. So the question is: Am I overdoing this? I don't intend to call it quits for quite a while, as I haven't even determined what I'd do with my time. Should I be balancing things out a little more and not focusing so much on keeping my spending the same as my income rises? It seems at this rate that I might become so accustomed to saving that I'll never be able to let myself retire, so I'm not sure what the point of doing all of this is.
Finance Dave said:dreamer, one thing I'd point out....as this has started happening to us the past 2-3 years.
.
Think of it this way. If you have $1M in a portfolio that's 70% equities (let's say S&P500), and the market (S&P) goes up by 1% on a given day, then you've just increased your balance by $7,000. While that doesn't sound like a lot...that's one day. There are approximately 250 "business" days in a year...so the amounts can be significant quickly.
.
Would you say the second million is easier than the first then? We're on the long slow slog to our first million, and your post gives me some hope that a larger balance can speed the way a bit. Subject to market returns of course...
Would you say the second million is easier than the first then? We're on the long slow slog to our first million, and your post gives me some hope that a larger balance can speed the way a bit. Subject to market returns of course...
Year | Contribution | Investment return | Balance |
7% | |||
1 | 20 | 1 | 21 |
2 | 21 | 3 | 45 |
3 | 21 | 5 | 71 |
4 | 22 | 6 | 99 |
5 | 23 | 9 | 130 |
6 | 23 | 11 | 164 |
7 | 24 | 13 | 201 |
8 | 25 | 16 | 242 |
9 | 25 | 19 | 286 |
10 | 26 | 22 | 333 |
11 | 27 | 25 | 386 |
12 | 28 | 29 | 442 |
13 | 29 | 33 | 504 |
14 | 29 | 37 | 570 |
15 | 30 | 42 | 643 |
16 | 31 | 47 | 721 |
17 | 32 | 53 | 806 |
18 | 33 | 59 | 897 |
19 | 34 | 65 | 997 |
502 | 494 | ||
20 | 35 | 72 | 1,104 |
21 | 36 | 80 | 1,220 |
22 | 37 | 88 | 1,345 |
23 | 38 | 97 | 1,480 |
24 | 39 | 106 | 1,626 |
25 | 41 | 117 | 1,784 |
26 | 42 | 128 | 1,953 |
27 | 43 | 140 | 2,136 |
312 | 827 | ||
28 | 44 | 153 | 2,333 |
29 | 46 | 167 | 2,545 |
30 | 47 | 181 | 2,774 |
31 | 49 | 198 | 3,020 |
186 | 698 | ||
1,000 | 2,020 | 3,020 | |
Yeah, "the rich get richer" is true, provided Mr. Market delivers.Would you say the second million is easier than the first then? We're on the long slow slog to our first million, and your post gives me some hope that a larger balance can speed the way a bit. Subject to market returns of course...
No, I do not think you are overdoing it, as long as you don't feel deprived.