Some Basic Questions -- Beginner Mustachian

[MoreForShow]

Hello all,

I recently discovered Mr Money Mustache and have been reading the boards off and on for awhile now.  I graduated from college a little over a year ago and just finished up my first full year at my new job. I had a couple questions for the veteran mustachians and was hoping to gain some insight on the best path to take as a beginner investor.

Background: I bring in roughly 48K/YR after tax income (will increase slightly over the years as I gain experience).  My expenses are about 22K/YR. I was able to save 25K my first year rather easily which is why I quickly realized with a solid plan I would be able to retire relatively early.  I have no debt and do not need to save for a car or home so I am saving/investing solely for an early retirement.

My questions:

-With the 25K currently ready to be invested, how should I allocate it?  From my basic research it seems I should max a Roth IRA (before April 15th for 2014) and then simply stash the rest in index funds through a taxable brokerage account.

-Moving forward, with the roughly 26K/YR I'll be able to save and invest, is keeping the same strategy my best option? (Roth IRA and the rest in index funds...I have no 401K at my work) Also as far as investing in these index funds, would the Three Fund Lazy Portfolio be my best route?

-When can I expect to become FIRE?

Thanks so much in advance!

[southern granny]

I don't really have any advice for you, I just wanted to say congratulations for getting off to such a good start.  That's amazing.

[MDM]

-With the 25K currently ready to be invested, how should I allocate it?  From my basic research it seems I should max a Roth IRA (before April 15th for 2014) and then simply stash the rest in index funds through a taxable brokerage account.

For traditional vs. Roth, read http://www.madfientist.com/traditional-ira-vs-roth-ira/ and decide what scenario will likely apply to you.  After that you have it right.

-Moving forward, with the roughly 26K/YR I'll be able to save and invest, is keeping the same strategy my best option? (Roth IRA and the rest in index funds...I have no 401K at my work) Also as far as investing in these index funds, would the Three Fund Lazy Portfolio be my best route?

Best is impossible to know in advance.  What you propose is very reasonable.  Note that the higher your marginal tax bracket, the more likely Traditional will be better than Roth.  Also, is there a specific reason why no 401k is available?  That is somewhat unusual.

-When can I expect to become FIRE?

Time in years to FI = Ln((S + i*E/WR) / (S + i*A)) / Ln(1 + i)

A = Asset amount currently invested in funds you will draw upon in retirement.
E = Total (including taxes) annual expenses in retirement
i =  Return on invested retirement funds.
S = Annual amount invested in funds you will draw upon in retirement.
WR = Withdrawal Rate planned for retirement, using Trinity Study definitions.

There are plenty of nuances that could affect the calculation above, but it should put you in the ballpark if things don't change much from your assumptions today.