Starting my journey to early retirement

[Speed Racer]

Hi everyone, someone mentioned this forum in a reddit post and I decided to join after reading a lot of good discussion that isn't just a bunch of rich guys talking about how they somehow managed to FIRE on their six digit salary.

Based on reading, it seems like I'm one of the youngest members. I'm 24 and started officially trying to FIRE last year with my first job out of college. Through some unfortunate circumstances, I lost my job towards then end of the year and did not find a suitable job until March (just in time, right?). Thankfully, I was able to get unemployment and was able to keep myself afloat. By the end of last year I still managed to increase my net worth from about $1k to $20k. My new job is a bit farther away, but is a nice increase in pay from my last one.

My "easy" goal is to retire before my dad did, which is 58 years old. I'm more than confident I have enough discipline to do that. My more challenging goal is to retire at 50. I don't anticipate being like some of the guys you see who are in their 30s making $200k and decide to try to FIRE and be able to do it within 5-10 years. That's not to say I don't plan on trying to increase my salary as much as possible in the coming years. In the next few years I want to increase my net worth by roughly $15-20k per year and hopefully my salary and market earnings will allow that number to increase accordingly.

Anyway, enough of my rambling about that. A little bit about me, I love sports, especially racing, baseball, college basketball, and football. I'm also really into music, especially stuff from the 60s. I've probably been to 7 or 8 Beach Boys and Brian Wilson concerts at this point. One final thing, I'm a car guy. If anything keeps me from being able to FIRE, it will be cars!!

 

[ugeauxgirl]

Welcome Speed Racer- I loved that cartoon when I was a kid. Lots of knowledge on this board and people willing to share. I enjoy it and I bet you will too!

 

[CaliKid]

I have wasted a ton of money on cars. Definitely could be said I could have retired a year or two or five earlier if I hadn't wasted so much money on cars. I would definitely find a way to be happy with someone cheap and drive it until the wheels fall off. You'll be way better off in the long run.

Biggest thing is watch for lifestyle creep. Keep things as simple as you can for as long as you can.

You are getting a good start by being aware at a young age. Keep it up!

Good luck!

 

[pb4uski]

My advice to you would be to buy a copy of Quicken Deluxe and use its Lifetime Planner to plan out your finances.... then use Quicken to monitor your progress. Or Personal Capital is another tool that I haven't used but seems very popular. Or FIRECalc (link on the bottom of this page).

 

[WyomingLife]

Hi everyone, someone mentioned this forum in a reddit post and I decided to join after reading a lot of good discussion that isn't just a bunch of rich guys talking about how they somehow managed to FIRE on their six digit salary.

Based on reading, it seems like I'm one of the youngest members. I'm 24 and started officially trying to FIRE last year with my first job out of college. Through some unfortunate circumstances, I lost my job towards then end of the year and did not find a suitable job until March (just in time, right?). Thankfully, I was able to get unemployment and was able to keep myself afloat. By the end of last year I still managed to increase my net worth from about $1k to $20k. My new job is a bit farther away, but is a nice increase in pay from my last one.

My "easy" goal is to retire before my dad did, which is 58 years old. I'm more than confident I have enough discipline to do that. My more challenging goal is to retire at 50. I don't anticipate being like some of the guys you see who are in their 30s making $200k and decide to try to FIRE and be able to do it within 5-10 years. That's not to say I don't plan on trying to increase my salary as much as possible in the coming years. In the next few years I want to increase my net worth by roughly $15-20k per year and hopefully my salary and market earnings will allow that number to increase accordingly.

Anyway, enough of my rambling about that. A little bit about me, I love sports, especially racing, baseball, college basketball, and football. I'm also really into music, especially stuff from the 60s. I've probably been to 7 or 8 Beach Boys and Brian Wilson concerts at this point. One final thing, I'm a car guy. If anything keeps me from being able to FIRE, it will be cars!!

You are an impressive person. Great to have you here. It took me until age 48 to learn what you already know. I hope you will contribute frequently here.

 

[Cassius King]

Welcome aboard. You're off to a great start and have the right mindset. Get the emergency savings in place get a full match from employer and max out the Roth every year.
On another note, life happens. There will be bumps in the road to your plans. Go with the flow and adjust accordingly. But remember to stay the course. Best of luck!

 

[Speed Racer]

My advice to you would be to buy a copy of Quicken Deluxe and use its Lifetime Planner to plan out your finances.... then use Quicken to monitor your progress. Or Personal Capital is another tool that I haven't used but seems very popular. Or FIRECalc (link on the bottom of this page).

Thanks for the recommendation. Right now I have a spreadsheet where I keep track of my spending and update my net worth once a month. I also have access to Fidelity Full View, but I don't check it that often. I discovered FIRECalc not too long ago and have spent way too much time playing with all kinds of scenarios lol. It does seem like I'm on track, but these first few years will be the hardest and most important.

 

[Speed Racer]

I have wasted a ton of money on cars. Definitely could be said I could have retired a year or two or five earlier if I hadn't wasted so much money on cars. I would definitely find a way to be happy with someone cheap and drive it until the wheels fall off. You'll be way better off in the long run.

Biggest thing is watch for lifestyle creep. Keep things as simple as you can for as long as you can.

You are getting a good start by being aware at a young age. Keep it up!

Good luck!

I did buy a 2015 last year and I justified it by knowing I had been wanting to buy a newer car since I started driving. I was also driving a 30 year old car and a 20 year old car before that. I would say I slightly regret buying something so new, but I was also really tired of driving really old cars. I've thought about trading it in for something cheaper, but I don't know how long it would be before I'd be wanting something new again, like the new Bronco.

 

[Closet_Gamer]

Sounds like you're off to a great start! Congrats on getting money put away.

A few suggestions:

1) Read the "Millionaire Next Door." Twice.

2) Remember that % saved is a greater determinate of wealth creation than trying to find some fancy portfolio. Start at 20% minimum. Every time you get a raise, put 50% towards savings and 50% towards lifestyle. That allows you to enjoy life a bit without eating all of your pay check.

3) Learn how to manage your own money to avoid bleeding points each year to "advisers" who are largely just salespeople. 1% on $20K may not seem like much, but you WILL have a $1M at some point. And then 1% is $10K/year.

4) Don't knock six figure salaries! You're 24. You could easily get there and they certainly help when put alongside #2.

5) Remember to enjoy life! Life is not a balance sheet exercise. Its great to retire at 50...but not at the cost of failing to really live in your 20s, 30s, and 40s.

Good luck & welcome!

 

[Katiek]

Welcome Speed Racer! I love to see the focus you have for financial responsibility and savings. The money you save and invest now will have a big impact on your later life.


If having specific retirement targets helps motivate you, great. My only advice would be that a lot can happen in 30 years and I wouldn't be so focused on a particular goal that you don't enjoy the process along the way. I always found it helpful to focus on improving my financial position because it gave me more freedom to make the choices that were right for me. At one point that included switching to a job that paid less but was a much better fit for me in the long run.



Life can be full of a variety of choices including possibly spouses, kids, moves, sabbaticals, health challenges, job changes and retirement. Have a good financial safety net and being intentional about your money will serve you well all during your life and open up a lot of options for you.

 

[pj.mask]

You have a long horizon, don’t get bogged down by details. You are in the big picture phase.
This is an often quoted table:

https://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/

Big advice is save as much as you can as early as you can. As you age (progress through stages of life - kids, aging parents, etc) it typically gets harder to save. If you save enough early, spending more later won’t take you off track much because your early savings can keep compounding for you.

You’re on a 20-30 year journey. This is not get rich quick and because of the timeline should not be your focus in life. It should be a passive thing you check in on every so often (I do monthly as well).

 

[ugeauxgirl]

I did buy a 2015 last year and I justified it by knowing I had been wanting to buy a newer car since I started driving. I was also driving a 30 year old car and a 20 year old car before that. I would say I slightly regret buying something so new, but I was also really tired of driving really old cars. I've thought about trading it in for something cheaper, but I don't know how long it would be before I'd be wanting something new again, like the new Bronco.

I'd keep your car. If you deprive yourself too much you won't be able to stick with the plan. Also set yourself up with some rewards. I'm about to buy myself a newish used Miata- a reward for years of frugal spending...

 

[Grimelowe]

Welcome Speed Racer! You will get there if you are already thinking about it. Make saving a habit (20K in one year is impressive at 24) and turn the big knobs...Then enjoy the journey. I retired a month ago (45) and I really never got serious about it until 8 years ago. Fortunately, younger me made some good choices early based on recos from my parents and older colleagues.

 

[Speed Racer]

Sounds like you're off to a great start! Congrats on getting money put away.

A few suggestions:

1) Read the "Millionaire Next Door." Twice.

2) Remember that % saved is a greater determinate of wealth creation than trying to find some fancy portfolio. Start at 20% minimum. Every time you get a raise, put 50% towards savings and 50% towards lifestyle. That allows you to enjoy life a bit without eating all of your pay check.

3) Learn how to manage your own money to avoid bleeding points each year to "advisers" who are largely just salespeople. 1% on $20K may not seem like much, but you WILL have a $1M at some point. And then 1% is $10K/year.

4) Don't knock six figure salaries! You're 24. You could easily get there and they certainly help when put alongside #2.

5) Remember to enjoy life! Life is not a balance sheet exercise. Its great to retire at 50...but not at the cost of failing to really live in your 20s, 30s, and 40s.

Good luck & welcome!

Great post! I definitely plan to keep managing my money on my own. It just so happens that my degree is in Finance with a focus on financial planning. Originally I was wanting to get my CFP license, but as time goes on, I'm thinking I might want to stay in a more back office type of role.

I was trying to be careful not to knock six figure salaries. When I first became interested in this, it was just a little depressing to read so many people discovering FIRE later in life, but they already had a high salary to make it easy. Like I said, I certainly hope to get there!

Remembering to enjoy life is probably the toughest balancing act. It always feels like I'm never saving enough, but nearly every month I've ended up saving a large chunk of cash anyway. Even when I'm enjoying myself, I try to do little things to save extra money. When I go out with my friends for drinks, I usually do the driving. That way I know someone will buy me a drink for driving and it'll keeping from having an extra 2-3 drinks so I can safely drive everyone home. That's an extra $15-20 saved right there.

 

[Speed Racer]

Welcome aboard. You're off to a great start and have the right mindset. Get the emergency savings in place get a full match from employer and max out the Roth every year.
On another note, life happens. There will be bumps in the road to your plans. Go with the flow and adjust accordingly. But remember to stay the course. Best of luck!

Definitely get the match and max out the roth. I had a bump in the road last year when I sprained my ankle and had about $1500 in medical bills. Not a huge amount, but still annoying when every penny counts at my age.

I see you're a fellow Cincinnatian, here's to renewed hope for the Bengals and Reds whenever sports resume!

 

[ut2sua]

OP,
Welcome. I will bet that you will be able to FIRE before 50 or perhaps even earlier if you choose to. You are still very young, so time is on your side. Just make sure you save consistently, buy low cost diversified ETF or mutual funds and don't play with the market too much (don't need to time the market). You will have a lot more $ than you think in 10->15 years.

 

[ImThinkin2019]

Welcome Speed_Racer!

I agree with all that has been said above. Especially the things Closet_Gamer listed.

I too am a big proponent of reading the Millionaire Next Door. Also (although I have not read it), Rich Dad Poor Dad is recommended by some younger people at work.

Here are some other thoughts to supplement what has already been said:

1. LBYM - this is probably the most common behavior of early retirees. A fun read about this is the Cheapskates Guide to Retirement. You don't have to be as extreme but its interesting to see how others acheive financial freedom by keeping their spending low.

2. Diversify your investments - asset classes vary over time in their returns. One example of how to do this is invest your work 401K in index funds or low fee stock funds, and use the money you spend for housing to buy a duplex or three or four apartment building. Rent the other apartments and live in one. Learn to do some of the maintenance yourself. Once you own the building the rents will be an income stream. There is risk doing this so look for others with experience to learn from.

3. Get rich slowly and steadily - beware of high return schemes. If they sound really good, be very careful. There are a lot of people who make money by gently fleecing unsuspecting innocents. If someone is selling a method to get high returns, ask why they are selling it rather than using it for their own investments.....

4. Understand stock market valuation metrics - Warren Buffet's, Jeremy Grantham's, forward PE. Undoubtedly in your lifetime there will be more smart people who come up with more models. Be a student of this.

5. If you marry, make sure your spouse has the same values and life goals as you. Noone plans on getting a divorce but they happen often. They are known as "the great wealth destroyer".

6. Invest in every tax deferred vehicle you can - max out your 401K. We love them because they resulted in automatic regular saving without us having to do much.

7. Be prepared for financial crises - they will happen. In our life we have seen stagflation, crashes of 1987, 2001, 2008, 2020. In all cases we just stayed the course and kept investing - not because we are smart, but rather because we did not know what else to do. We found over the long term, we ended up ahead. Sometimes it took 10 years, though. (I had a friend who was buying stocks in the 70's and his fresh money then was just enough that his accounts stayed flat. But later, his account values increased a lot because he had accumulated stocks at reduced prices...)

8. You will make mistakes - don't beat yourself up when you do. Look at them as tuition payments in the school of life.

9. Give credit to yourself - you have come here and asked for advice from this community, which is smart of you. And you are starting early.

10. Try to do things that give lasting satisfaction - such as being part of a service group or a church group. Create relationships to enrich your life.

There will be more good thoughts from others. Best wishes to you!!!!

 

[pacergal]

Welcome,, this is a great place to learn and share.
It sounds like you are well on your way.
Live below your means, save in every way you can, be aware of your spending choices, make a budget and stick to it, but also plan to have some fun along the way.

Bogleheads has a great reading recommendation section.
This forum has lots of wonderful advice and firecalc.

You will have many life changes and decisions along the way.
Enjoy the journey! Best wishes to you.

 

[OldShooter]

Lots of advice available here. Miy standard terms: All opinions guaranteed worth price paid.

That said:

1) I teach an adult-ed investing course and the first two bullets on the first slide on the first day are

• Investing will not make you rich.
• Saving will make you rich.

2) Here is a quick, free, read targeted exactly at you: "If You Can" by William Bernstein https://www.etf.com/docs/IfYouCan.pdf

3) RE cars, I have had many. ranging from AC Cobra (Shelby 289), Lotus, etc. to staid Volvo wagons, plus 15 years of racing sports cars (Swift DB-1 mostly). My rule, and I strongly suggest it for you, is to never buy a car you can't afford. "Can't afford" is defined as having to borrow money to buy it. (Leasing is just a complicated and expensive way to borrow.)

Funny story: About 30 years ago I bought my wife a Merkur Scorpio, a spectacularly capable performance sedan and equally spectacular marketing failure. The next day she was telling some friends at work about the car and someone said "OK, he gave you the car. But who is going to make the payments?" She said, "There are no payments." The group was flabbergasted. That was a bigger surprise than the fact that I had bought her a car.

 

[Retire52]

You are ahead of your peers by a long shot. My experience is that you will be pleasantly surprised how quickly you can reach your goals. After working in a miserable job for about 6 months I sat down and developed a written financial plan when I was 42. My plan indicated I'd be able to FIRE in 10 years. At the time DW and I had a modest amount in investments --maybe about $150k, big mortgage, some credit card debt, and were both working towards pensions. Fast forward 6 years, better than expected promotions, investment returns and bigger savings rate and we RE. This as you will read is very common experience with many in this forum.

One advice, keep it simple stupid. Read one book, A Simple Path to Wealth, by JL Collins, or you can read his blog, which has the same info-- jlcollinsnh.com. if you go to the blog, read his stock series. His writing is succinct, engaging and more importantly, his thinking is strategic.

 

[38Chevy454]

Welcome to the forum. You are already far ahead of most of your peers. Agree with the previous comments, keep savings what you can, don't deprive yourself of some nice things and enjoying life. The magic of compounding and continuous saving are what will get you there to your retirement goals. Being a finance major, you already have some good understanding, maintain the self-directed investing and keeping fees low. There is never anything bad to get some more letters after your name, so CFP is a good thing even if you later go down a different path.


Life does have a way of throwing curve balls and what you think and plan now can drastically change. Be open to those opportunities, but don't abandon planning and goals that work with your current situation.


I have always had cars as a hobby. I spend money on them, but also get enjoyment from them. Life is not always about strict financial maximization of every step. The key is to have balance and perspective. I have had 2 cars or more since I was 18. Currently have 5 older cars 1937-68, and 5 daily driver type 1988-2016, plus a nice motorhome. By doing my own repairs and rebuilding or modifying the cars myself, I don't really spend that much. Never have lost money on any old car, although my labor rate has been pretty low. Some I have made considerable increase.

 

[Speed Racer]

Welcome Speed_Racer!

I agree with all that has been said above. Especially the things Closet_Gamer listed.

I too am a big proponent of reading the Millionaire Next Door. Also (although I have not read it), Rich Dad Poor Dad is recommended by some younger people at work.

Here are some other thoughts to supplement what has already been said:

1. LBYM - this is probably the most common behavior of early retirees. A fun read about this is the Cheapskates Guide to Retirement. You don't have to be as extreme but its interesting to see how others acheive financial freedom by keeping their spending low.

2. Diversify your investments - asset classes vary over time in their returns. One example of how to do this is invest your work 401K in index funds or low fee stock funds, and use the money you spend for housing to buy a duplex or three or four apartment building. Rent the other apartments and live in one. Learn to do some of the maintenance yourself. Once you own the building the rents will be an income stream. There is risk doing this so look for others with experience to learn from.

3. Get rich slowly and steadily - beware of high return schemes. If they sound really good, be very careful. There are a lot of people who make money by gently fleecing unsuspecting innocents. If someone is selling a method to get high returns, ask why they are selling it rather than using it for their own investments.....

4. Understand stock market valuation metrics - Warren Buffet's, Jeremy Grantham's, forward PE. Undoubtedly in your lifetime there will be more smart people who come up with more models. Be a student of this.

5. If you marry, make sure your spouse has the same values and life goals as you. Noone plans on getting a divorce but they happen often. They are known as "the great wealth destroyer".

6. Invest in every tax deferred vehicle you can - max out your 401K. We love them because they resulted in automatic regular saving without us having to do much.

7. Be prepared for financial crises - they will happen. In our life we have seen stagflation, crashes of 1987, 2001, 2008, 2020. In all cases we just stayed the course and kept investing - not because we are smart, but rather because we did not know what else to do. We found over the long term, we ended up ahead. Sometimes it took 10 years, though. (I had a friend who was buying stocks in the 70's and his fresh money then was just enough that his accounts stayed flat. But later, his account values increased a lot because he had accumulated stocks at reduced prices...)

8. You will make mistakes - don't beat yourself up when you do. Look at them as tuition payments in the school of life.

9. Give credit to yourself - you have come here and asked for advice from this community, which is smart of you. And you are starting early.

10. Try to do things that give lasting satisfaction - such as being part of a service group or a church group. Create relationships to enrich your life.

There will be more good thoughts from others. Best wishes to you!!!!

Lots of great points! In particular, I did read Rich Dad Poor Dad 2-3 years ago. Before that I had a general want of wanting to retire early (and even had my dad put my money into the stock market in 7th grade, which I don't count towards my net worth right now), but that book really put it into focus. That said, parts of it almost seemed like a get rich quick scheme as the book went on. Still a solid read for someone just starting out.

I recently started having my girlfriend keep track of her spending on a spread sheet the way I do. She's a bit in a hole financially because her parents left her holding the bag for student loans (without telling her), but she gets really excited seeing her net worth increase. She used to say she'll never be able to retire, which is pretty crazy when she still has 30-35 years to retirement. I don't know what the future holds for us, but I think we're mostly on the same page right now.

 

[Speed Racer]

Lots of advice available here. Miy standard terms: All opinions guaranteed worth price paid.

That said:

1) I teach an adult-ed investing course and the first two bullets on the first slide on the first day are

• Investing will not make you rich.
• Saving will make you rich.

2) Here is a quick, free, read targeted exactly at you: "If You Can" by William Bernstein https://www.etf.com/docs/IfYouCan.pdf

3) RE cars, I have had many. ranging from AC Cobra (Shelby 289), Lotus, etc. to staid Volvo wagons, plus 15 years of racing sports cars (Swift DB-1 mostly). My rule, and I strongly suggest it for you, is to never buy a car you can't afford. "Can't afford" is defined as having to borrow money to buy it. (Leasing is just a complicated and expensive way to borrow.)

Funny story: About 30 years ago I bought my wife a Merkur Scorpio, a spectacularly capable performance sedan and equally spectacular marketing failure. The next day she was telling some friends at work about the car and someone said "OK, he gave you the car. But who is going to make the payments?" She said, "There are no payments." The group was flabbergasted. That was a bigger surprise than the fact that I had bought her a car.

Very cool stable of cars you've had! I was really fascinated with Merkur when I was younger. It seemed so odd to me to start a new car brand when they did and as you said, marketing was not the best.

I did go the financing route with my car. I could pay it off now, but my logic is I'm also wanting to save for a down payment on a house if I decide to go that route. I was actually going to start a thread on this. Do you think that's a bad move to keep doing monthly payments?

 

[HI Bill]

1) I teach an adult-ed investing course and the first two bullets on the first slide on the first day are

• Investing will not make you rich.
• Saving will make you rich.

I have to disagree here. I used to save $ in a bank account. If I had left the money there, I'd have a third of what my investments are worth, and they wouldn't have kept up with inflation. I always talk about my 'savings and investments'. Saving and investing over the long-term is the only way to ensure that your money, on average, can double every decade. Saving without investing in something with realistic appreciation potential and low-moderate risk ensures one will end up with less money to spend, inflation-adjusted, in 30 years that they originally saved, especially in this low interest rate environment. I didn't save $3M, and have barely earned that much by w$rking. But thanks to putting my savings to work (investing)...

 

[OldShooter]

I have to disagree here. I used to save $ in a bank account. If I had left the money there, I'd have a third of what my investments are worth ...

Yup. That's why the next slide in the deck is this one:

​