Author Topic: 29 and doing.. Ok? Advice, tips, suggestions appreciated  (Read 4256 times)

LG89

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29 and doing.. Ok? Advice, tips, suggestions appreciated
« on: May 01, 2018, 02:29:02 PM »
Life Situation:
Single/Never Married, No depedents, NoVa resident, 30 is rounding the corner. Working in an admin/proj type role. $4k bonus in 2018 for 2017. Renting with a roommate.
   
Gross Salary/Wages
Bi-weekly paycheck: $2,624.76
Annual: $68,243.76

Pre-tax Deductions   
-$157.14 (401k - this is low to get my full match but no more. Used to be a lot higher like around 20% but I figured I could pull back to the minimum contribution in order to beef up my cash savings, willing to bump it up to 10%)
-$66.12 (Dental+HMO)

Total Takehome
$1124.56 - checking, this is what gets spent
$400 to Ally Savings for House Saving Account
$250 to General/All-purpose Nest Egg
Total take home ($1124.56+$400+$250) = $1774.56

Taxes
-$626.44 (Fed tax, SS, Medicare, state, ltd)

Assets Total: $157,642 (does not include my checking account)
$13,316 (Ally savings - house downpayment)
$3,480 (Ally savings - general savings)
$104,897 (Fidelity 401k - Target 2060 fund - 70% VG Instl. 500 Index Trust 30% VG Instl. Total Intl Stock Market Index Trust )
$35,446 (Vanguard roth IRA - VTSAX, about 490 shares and VBMFX, about 289 shares)
$503.37 (Wealthfront - a whole mess of stuff, just started as an experiment for me to put in $500 and see what happens in a year, I think my allocation after their assessment put me at aggressive)

March Expense Total: -$2,610 (Ouch - facepunch deserved, but look at April!)
-$1,300 (Rent which includes all utilties, parking, cable/internet)
-$405 (Education - this might be expensed if I pass my exam)
-$232 (Gifts - Ouch, unforunately this was an expensive month with a wedding, birthdays, gift for my friend's baby, etc)
-$212 (Clothing - $110 at a thrift store and I'm not mad about the 5 pieces of clothing I got there, including a nice Banana Republic petite trench for  $30. $100 spent at Nordstrom though and that is definitely punchworthy but most likely for shoes for m
-$136 (Groceries - didn't eat out for every meal but probably for most meals - ideal target number and I'm working to get it to this or lower)
-$88 (Gas)
-$80 (Travel - this is gas and tolls for the drive up to philly to see my friend for her birthday)
-$53 (Health - chelated magnesium and a bottle of b-complex, pretty important for my overall health since I've started taking them I feel better)
-$39 ($7 netflix AND chocolate tour for friends - won't be buying for people again, punch)
-$36 ($14 for bagels for the office/team, $22 for korean food for breakfast lunch and dinner)
-$26 (Electronics - punch, poor planning and ran into 7 eleven to buy overpriced cut up mangoes to eat on the way to Philly and a car charger so my phone did die while using GPS)

April Expense Total: -$1,703 (I saw Feb and vowed to do better)
-$1,300 (Rent which includes all utilties, parking, cable/internet)
-$162 (Groceries - yes this is probably kind of high for one person but I love fresh fruit and I already shop at a cheap grocer, I also cook almost every single meal)
-$73 (Gas)
-$70 (Exam re-schedule for a certification - if I pass this will be expensed)
-$34 (Classified as other in PC: a $5 payment to the what color is your parachute site, it sucks dont pay it; and fancy chocolates that I wanted to treat myself to $10 a bar and I bought three)
-$34 (Clothing - $19 for dry cleaning my puffy winter coat to put away for the season and $15 from the thrift shop for 3 sweaters)
-$12 (Restaurants - $5 mistakenly thought one training would provide breakfast and they didn't so I got McDonalds for me and the homeless guy who asked me if I could get him a McGriddle, I obliged of course. And then $7 for popeyes with my boss and co-worker at a different office because non-paid for lunches dont happen all that often at work)
-$7 (Entertainment/Netflix)
-$7 (Health/med - generic allergy meds from Target)

For my car insurance and cell, I'm still covered under my parents so I just pay a big lump sum every 6 months of about $200. I don't really keep track of this and actually forget the exact amounts but I'm ok with the amount. I should probably keep better track of this moving forward. Car is a 2004 Nissan Altima and I plan on driving it into the ground, had to spent $2.2k for some fixes in Feb which ate up most of my bonus but I preferred paying the $2k over a car payment).

I'm currently using Personal Capital to track all of this and this is where most of the information comes from. Last year it said I spent on average $1773 but this information is not reliable as I moved out of my parent's home in the middle of year. It otherwise would have been much higher. From January to April my total spend for the year is currently at $11,434 with an average of $2,876. OUCH. Feb's total was $4400 (the $2.2k car fix) and also I gave my sibling a cash gift of $300 for their engagement (which I'm not regretting at all and I'm not getting punched for that). Also had the annual chase dues and car tax hit this month. My groceries and gas were actually significantly lower than in April/March. 

So I know I can knuckle down and get my expense lower if I stay disciplined. Other than getting cheaper rent (working on that) I don't think there's really much room for me to improve without sacrificing my sanity? I'm open to being proven wrong though.

Liabilities:
-$2500 at 0% on a credit card for the next 15 billing cycles - for lasik and not planning to pay off early bc of the 0 interest rate. Student loans of around 20 to 25k paid off after about 2.5 years from graduation. (Which, off-topic but I had a not so easy time completing the verification because the image was so grainy...)

Specific Question(s):
What else do I need to do to reach FI sooner? Do I need to open some other accounts? I'm certified to teach yoga and one day I'd like to be able to do this near full time without the need for a corporate job. Part time job... I've applied to Sephora for an overnight position, for an online beauty consultant, teaching english online overseas (thanks to the forum). I've been toying around the idea of making it a goal to get just ONE private yoga client, but I'm not sure where to start so any encouragement and direction would be much appreciated. I'm a pretty decent teacher! The aim is to have more of a cushion to regularly fund the IRA (For now, I just do lump sum out of one of my Ally accounts whenever I feel like making a decent in the $5500 limit) and for rent. My savings account also function as a general cushion even though it's split out.

I'm also planning to always work so FI is really more my goal than retiring early. Partly because I'm sure I'll have to support my parents as they age/retire and need care/money. This isn't really up for discussion, just something I keep in mind as I make career/financial decisions. Balancing my future needs, current needs, and my parents future needs.

I'm also trying to figure out my next living situation as I really hate living with my roommate. This person is inconsiderate (leaving laundry in the wash for a few days so I cant use it, cooking food and leaving it on the stove for a few days and it rots, etc). I'd really like to live on my own but I don't think at my salary I can afford to do so here in the DMV. I thought about buying earlier in the year but with the insane bidding and selling of condos approaching half a mil.. I don't think so. I'm fine with renting for now but eventually I'll want to put down more permanent roots and do my own homesteading. Right now I'm wondering if I should pay a little more ($1100 to $1300) to have my own studio apartment inside the beltway or slightly less (ranges from $850 to $1100 - depending on how far from DC) and try and find a better roommate. I feel pretty stressed and depressed (I have been diagnosed and suggested meds but I'd rather not and hence the vitamins) from having a roommate and I think my mental health would overall be better without one but that seems more like a luxury.

Thank you for taking the time to read and respond!

**UPDATE**

Looking for advice on what to do with my savings and where to put it to maximize. Not looking for suggestions to better track or budget due to using a thresh hold spending style (which yes, works for me and is how I can get to a lower monthly spend). Thanks!

**UPDATE**

My  monthly cap is at about $1800 and this change was implemented following my March expense month. See April. It's in effect and effective.

**UPDATE**

Made allocation changes to 401k per the advice below from MustacheAnxiety and SuperSecretName.
« Last Edit: May 02, 2018, 09:02:39 AM by LG89 »

MustacheAnxiety

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Re: 29 and doing.. Ok? Advice, tips, suggestions appreciated
« Reply #1 on: May 01, 2018, 03:22:37 PM »
My thoughts

Investing:
1) Move your 401(k) out of the target date 2060 fund (.75% fees) to Fidelity Total Market or Fidelity 500 (.035% fees) or similar if these are not available.  .715% is a lot of money to pay for someone to slowly move you from equities to bonds.
2) Invest your house down payment.  I know this isn't traditional advice, but buying a house does not seem to be in your future while you live in the DMV (60K down payment for a 300K condo at $400 per month = 12.5 years).  So you may as well put your $400 per month into a superior money earning vehicle.

Expenses:
1) Stop shopping for clothes.  This is not an activity you need to spend money on every month.  Even if it is a thrift store, even if it is a great deal.  It is another item to be stored in your small DMV apartment and moved.  If you just love the fun of shopping try picking one or two fairly specific things (I would really love a perfect fitting Theory sport coat) to hunt for in the thrift store and if you do not find them, don't buy anything.
2) Try to make a budget and stick to it.  It seems like you do really well when trying hard, but spending can double otherwise.
3) What is your commute situation like, if you are moving anyway is biking an option? Can you go car free with the assistance of the Metro?
4) Eating out? Your March expenses were kind of confusing "$136 (Groceries - didn't eat out for every meal but probably for most meals - ideal target number and I'm working to get it to this or lower)" but then there was no restaurant spending.  Maybe this was just a ton of free work food or there is something to be done here?
5) Don't buy a 500K condo or a 300K condo or a 200K condo.  At least not as a single person.  It will put FIRE much further away. My personal guideline for home buying is 1-2x annual salary if you don't want to sink FIRE plans.

Sanity:
1) If you do not have a good roomate picked out for the next place, consider renting a 2 bedroom on your own and interviewing people to take the extra room.  You will have lots of interest and you can pick someone more considerate.  The downside is 1 month of rent on your own.  Alternatively have you looked at living on your own in a "garden level" (halfway underground) apartment.

Making more money:
1) Change Jobs: If you have been at your current gig for 2+ years you are probably leaving money on the table by staying longer.  http://money.cnn.com/2017/11/07/news/economy/job-openings/index.html  Do some research on what you are worth after 7 years of experience and I bet (knowing nothing about what a project analyst does) you are worth at least 15% more in the HCOL of DC.
2) Are you getting a pay raise for extra education and passing exams, if not it is an even better reason to look elsewhere.
3) Can you get a company to sponsor you for a security clearance (if it would be useful in your job).  A top secret clearance can be worth 20K+ annually especially in the DMV.
4) Yoga: Can you get a very part time job at a fancypants gym teaching a couple classes a week?  Get a free membership, a negligible amount of money, and access to some potential clients for private lessons/classes (just watch out for non-competes).  It will also give you something great to talk about in your craigslist ad about all your experience.


LG89

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Re: 29 and doing.. Ok? Advice, tips, suggestions appreciated
« Reply #2 on: May 01, 2018, 03:49:22 PM »
My thoughts

Investing:
1) Move your 401(k) out of the target date 2060 fund (.75% fees) to Fidelity Total Market or Fidelity 500 (.035% fees) or similar if these are not available.  .715% is a lot of money to pay for someone to slowly move you from equities to bonds. Will definitely look into whether those funds are available, actually gonna this right after I'm done here.
2) Invest your house down payment.  I know this isn't traditional advice, but buying a house does not seem to be in your future while you live in the DMV (60K down payment for a 300K condo at $400 per month = 12.5 years).  So you may as well put your $400 per month into a superior money earning vehicle.Any suggestions of where to put it? I'm probably willing to put in at least half just so the other can function as an emergency fund stash

Expenses:
1) Stop shopping for clothes.  This is not an activity you need to spend money on every month.  Even if it is a thrift store, even if it is a great deal.  It is another item to be stored in your small DMV apartment and moved.  If you just love the fun of shopping try picking one or two fairly specific things (I would really love a perfect fitting Theory sport coat) to hunt for in the thrift store and if you do not find them, don't buy anything. Agreed, I don't buy every month, just so happened that March and April had items that I needed and were available at the thrift store or that I couldn't wait any longer to buy (special size shoe)
2) Try to make a budget and stick to it.  It seems like you do really well when trying hard, but spending can double otherwise. I've done budgets and tracked them to the penny but I seem to do better when I just hold myself to threshhold which is when I can easily knuckle down because it becomes a game.
3) What is your commute situation like, if you are moving anyway is biking an option? Can you go car free with the assistance of the Metro? I'm not planning on going car free, I realize this is a luxury but as a small person who grew up riding WMATA I'm not doing it again, especially since I get to work form home some days and parking is free at work. Biking will not be an option for me.
4) Eating out? Your March expenses were kind of confusing "$136 (Groceries - didn't eat out for every meal but probably for most meals - ideal target number and I'm working to get it to this or lower)" but then there was no restaurant spending.  Maybe this was just a ton of free work food or there is something to be done here? It's up there, listed with the bagels for the office and the korean food. $36 dollars for March.
5) Don't buy a 500K condo or a 300K condo or a 200K condo.  At least not as a single person.  It will put FIRE much further away. My personal guideline for home buying is 1-2x annual salary if you don't want to sink FIRE plans. No worries here, I think it's insane to do so right now when renting is cheaper and more convenient and less stressful.

Sanity:
1) If you do not have a good roomate picked out for the next place, consider renting a 2 bedroom on your own and interviewing people to take the extra room.  You will have lots of interest and you can pick someone more considerate.  The downside is 1 month of rent on your own.  Alternatively have you looked at living on your own in a "garden level" (halfway underground) apartment. Yep! I'm not looking at fancy high-rises or anything. Garden/basement apartments are fine by me. Renting the 2 bedroom on my own... this is an option. I guess I'm a little averse to it but maybe need to get over my fear!

Making more money:
1) Change Jobs: If you have been at your current gig for 2+ years you are probably leaving money on the table by staying longer.  http://money.cnn.com/2017/11/07/news/economy/job-openings/index.html  Do some research on what you are worth after 7 years of experience and I bet (knowing nothing about what a project analyst does) you are worth at least 15% more in the HCOL of DC. Agreed.. I actually thought maybe I was being lowballed at work but I started apply to positions around 2 weeks ago and so far I havent gotten any interviews yet... just need to keep trying I guess? Or maybe I'm just not that desirable as a worker
2) Are you getting a pay raise for extra education and passing exams, if not it is an even better reason to look elsewhere. I did get a cert last year that I thought wasn't so easy (ITIL practitioner) and I did get a merit raise, like 2%, but I don't think its directly related to me getting the cert.
3) Can you get a company to sponsor you for a security clearance (if it would be useful in your job).  A top secret clearance can be worth 20K+ annually especially in the DMV. Nope, unfortunately my company is in an industry where no one ever needs this. I should try and look for a position that could sponsor this but I'm not sure if anyone would even want me. I definitely would not mind taking a job that pays the same as the one I have now to get clearance sponsorship and open other employment doors.
4) Yoga: Can you get a very part time job at a fancypants gym teaching a couple classes a week?  Get a free membership, a negligible amount of money, and access to some potential clients for private lessons/classes (just watch out for non-competes).  It will also give you something great to talk about in your craigslist ad about all your experience. My membership is actually already free and I'm not interested in teaching at studios because well.. let's say I've been a part of the community long enough to want to avoid the drama that goes on there, I have enough of that at work. So to me, teaching privates seems a good alternative.

Thanks for the suggestions! I really appreciate it!

Updated again: I filtered on the funds available for my 401k that had a net expense ratio of .05% or less. Would I follow a 3 fund portfolio blend? And if so, which ones should I select? I'm thinking since I'm young it's fine to get with 90% stock and 10% bond, or maybe more stock? I've also never seen the "index trust" but they seem to have the lowest fees? On vanguard's site it says "none" and through my 401k they show no net expense ratios (and this is the one that matters right?).

Stocks
1 - Vanguard Institutional 500 Index Trust - shows gross er of 0.015%
2 - Vanguard Institutional Total International Stock Market Index Trust - shows gross er of 0.065%
3 - Vanguard Mid-Cap Index Fund Institutional Plus Shares (VMCPX)   
4 - Vanguard Small-Cap Index Fund Institutional Shares (VSCIX)
5 - Vanguard International Growth Fund Admiral Shares (VWILX)
6 - Vanguard Mid-Cap Growth Fund Investor Share (VMGRX)

Bonds
1 - Vanguard Institutional Total Bond Market Index Trust
2 - Vanguard Retirement Savings Trust III
3 - Vanguard Inflation-Protected Securities Fund Institutional Shares (VIPIX)
4 - Vanguard Total International Bond Index Fund Institutional Shares (VTIFX)

Okay, so I think it would be a good strategy to do a mix from these 3 below. If I'm already holding VBMFX in my Roth IRA, should I just change my 401k holdings to 1 and 2? Or should I still include bonds in my 401k? Or include it and have the bonds at 5% instead of 10%? Or should I dump VBMFX in my Roth IRA instead?

1 - Vanguard Institutional 500 Index Trust - (60% or more)
2 - Vanguard Institutional Total International Stock Market Index Trust (30%)
3 - Vanguard Institutional Total Bond Market Index Trust (10, 5 or 0%?)
« Last Edit: May 02, 2018, 07:23:07 AM by LG89 »

zoe2dot

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Re: 29 and doing.. Ok? Advice, tips, suggestions appreciated
« Reply #3 on: May 02, 2018, 07:31:43 AM »
You need to develop a comprehensive budget so we can better understand your cashflow.

You need to work known expenses to your budget: car registration, oil changes, hair cuts. 

Read up on the idea of sinking funds.  Example, you could start a line item for future car repairs.  Tuck $20 a month in it now so you have the reserve ready in a few years for next round of repairs.  When it caps out you can put that monthly $20 toward another sinking fund.  You can have several sinking funds in your budget. 

You need to price out what your utilities are so you can figure out how much your housing costs would be if you were paying for cable, internet, gas/electric, etc all on your own, or get a place where they are not included in the rent.



LG89

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Re: 29 and doing.. Ok? Advice, tips, suggestions appreciated
« Reply #4 on: May 02, 2018, 07:55:23 AM »
You need to develop a comprehensive budget so we can better understand your cashflow.

You need to work known expenses to your budget: car registration, oil changes, hair cuts. 

Read up on the idea of sinking funds.  Example, you could start a line item for future car repairs.  Tuck $20 a month in it now so you have the reserve ready in a few years for next round of repairs.  When it caps out you can put that monthly $20 toward another sinking fund.  You can have several sinking funds in your budget. 

You need to price out what your utilities are so you can figure out how much your housing costs would be if you were paying for cable, internet, gas/electric, etc all on your own, or get a place where they are not included in the rent.

I'm not really interested in advice for my expenses since I can do that on my own pretty well as indicated for April and prior months. Feb was a monster month for reasons I've outlined above. It works out pretty well to have my payments done in lump sum for my insurance and cell so I'm going to stick with that for now. While I have know expenses like haircuts (twice a year) and oil changes, they don't occur every month, it's not worth my time to split that out and do that every single month. Just doesn't make sense to me. My spending/budget is done by threshhold - and that works for me when I use it (as seen in April). I understand my cash flow pretty well from all the data Personal Capital has tracked.

My utilities are included as part of my rent. So no, I can't price out my utilities. All the rentals I'm looking at include all of that except cable which I don't plan on getting as I already have a netflix account and I dont access internet outside of my hours at work.
« Last Edit: May 02, 2018, 08:00:46 AM by LG89 »

zoe2dot

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Re: 29 and doing.. Ok? Advice, tips, suggestions appreciated
« Reply #5 on: May 02, 2018, 08:05:04 AM »
That is a fascinating approach. 

It's hard to give you advice on what to do with your savings without a handle on how much you need in an emergency fund (versus 401k contributions), how much you'd be spending per month living by yourself versus renting etc.

To me your monthly caps look like food rotting on the stove: something that could be taken care of in a timely fashion and worth cleaning up.




LG89

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Re: 29 and doing.. Ok? Advice, tips, suggestions appreciated
« Reply #6 on: May 02, 2018, 08:08:43 AM »
That is a fascinating approach. 

It's hard to give you advice on what to do with your savings without a handle on how much you need in an emergency fund (versus 401k contributions), how much you'd be spending per month living by yourself versus renting etc.

To me your monthly caps look like food rotting on the stove: something that could be taken care of in a timely fashion and worth cleaning up.

My monthly cap is at $1800. My emergency fund is a combination of my housing and nest egg. Sorry if you think this approach isn't useful but it works for me, comparing it to rotting food is a bit extreme. Feel free to disagree with my approach but saying that is pretty nasty.

zoe2dot

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Re: 29 and doing.. Ok? Advice, tips, suggestions appreciated
« Reply #7 on: May 02, 2018, 08:13:03 AM »
I do feel free to disagree with your approach, much like you feel free to disagree with your roommate leaving food on the stove. 

These case studies tend to ferret out problems that the original poster wasn't focusing on.  There will be a slew of suggestions; act on the ones you want to. 

LG89

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Re: 29 and doing.. Ok? Advice, tips, suggestions appreciated
« Reply #8 on: May 02, 2018, 08:18:42 AM »
I do feel free to disagree with your approach, much like you feel free to disagree with your roommate leaving food on the stove.  That's really not the same considering you're not living with those choices. Again, unnecessarily snarky just because I have a different approach.

These case studies tend to ferret out problems that the original poster wasn't focusing on.  There will be a slew of suggestions; act on the ones you want to. Yes, I will definitely do that.

MustacheAnxiety

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Re: 29 and doing.. Ok? Advice, tips, suggestions appreciated
« Reply #9 on: May 02, 2018, 08:24:33 AM »
Additional House Down Payment Investments: Open a regular Vanguard account, invest in low fee US equity mutual fund.  This should be easy as you already have a Roth IRA with them.  If it tanks in the next couple years try and be happy that you get to put more money in at a big discount and don't stress out.

401K: The Equity allocation seems fine for now. As a rule international stocks underperform US stocks over the long term.  But many suggest being in International for the next year or so as many foreign countries are just starting a recovery and the US may be at nearing the end of a long bull.  My limited personal experience over the last decade makes me disfavor international stocks.  Also for Bonds, if you want them you are right to put them in your 401K (or IRA) it is better for your taxes.  Right now I would look for a short term bond fund as interest rates are rising (likely through 2019) so the value of existing intermediate and long term bonds is going down.

Also I feel you on WMATA it could get weird, rude, and very occasionally scary.  But I hated DC drivers and ticket cameras so much more than the metro.

SuperSecretName

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Re: 29 and doing.. Ok? Advice, tips, suggestions appreciated
« Reply #10 on: May 02, 2018, 08:30:42 AM »
1st - you are doing just fine.

2nd - I'd give up on buying a house in this area.  There is nothing wrong with renting, especially in this HCOL area.  Your salary is good, not great.  Put that money in the 401k or Roth.

So, keep on keepin' on.  If you want to get to FIRE faster you'll need a side-gig, or other way to bring in more income.

LG89

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Re: 29 and doing.. Ok? Advice, tips, suggestions appreciated
« Reply #11 on: May 02, 2018, 08:36:08 AM »
Additional House Down Payment Investments: Open a regular Vanguard account, invest in low fee US equity mutual fund.  This should be easy as you already have a Roth IRA with them.  If it tanks in the next couple years try and be happy that you get to put more money in at a big discount and don't stress out.Will look into opening a regular Vanguard account now. I think I may actually need to look at my state's saving options too because I recall reading something about having savings in a brokerage account for VA being an option through some program. No one quote me on this.

401K: The Equity allocation seems fine for now. As a rule international stocks underperform US stocks over the long term.  But many suggest being in International for the next year or so as many foreign countries are just starting a recovery and the US may be at nearing the end of a long bull.  My limited personal experience over the last decade makes me disfavor international stocks.  Also for Bonds, if you want them you are right to put them in your 401K (or IRA) it is better for your taxes.  Right now I would look for a short term bond fund as interest rates are rising (likely through 2019) so the value of existing intermediate and long term bonds is going down.Ok, I'll make those changes now in my 401k. I just saw a post on reddit that suggested taking 30% of your stock allocation for bonds so I think having my internal stocks at 25% make the most sense for me. I'll probably keep bonds at 5%.

Also I feel you on WMATA it could get weird, rude, and very occasionally scary.  But I hated DC drivers and ticket cameras so much more than the metro. Yes, I've a couple of run ins when I was younger that probably should have involved police so thats probably why I'm so hesistant. All said, I still probably would do metro if it weren't so much more expensive AND longer of a commute. It's only somewhat of a consideration as I'm looking for a new place and new job. I know I can't have the perfect place so there will be tradeoffs but I'm definitely going to take this into account. If I continue to stay at my current company, I will most likely need to be moved to a location in Reston/Herndon so I could maybe bike if I manage find a place close enough to the WOD trail. 

Thanks again MustacheAnxiety! Off to implementation!

SuperSecretName

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Re: 29 and doing.. Ok? Advice, tips, suggestions appreciated
« Reply #12 on: May 02, 2018, 08:39:57 AM »
I'll probably keep bonds at 5%.
Generally, < 10% won't make any difference and just makes things more complicated.  Drop bonds to 0.

LG89

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Re: 29 and doing.. Ok? Advice, tips, suggestions appreciated
« Reply #13 on: May 02, 2018, 08:40:41 AM »
1st - you are doing just fine. Whew..

2nd - I'd give up on buying a house in this area.  There is nothing wrong with renting, especially in this HCOL area.  Your salary is good, not great.  Put that money in the 401k or Roth. Sigh yea, you're right. No worries, I actually kind of gleefully (but professionally and respectfully) told my realtor and one of the lenders to go take a hike last month. I think I'm still going to keep saving in some capacity and maybe have some sliver of hope? But yea no worries I won't buy. That would be financial suicide for me. The opportunities to buy are for other people who are both making significantly more and also have more saved.

So, keep on keepin' on.  If you want to get to FIRE faster you'll need a side-gig, or other way to bring in more income. Yes, agreed! I'm glad you outright said this.

LG89

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Re: 29 and doing.. Ok? Advice, tips, suggestions appreciated
« Reply #14 on: May 02, 2018, 08:42:33 AM »
I'll probably keep bonds at 5%.
Generally, < 10% won't make any difference and just makes things more complicated.  Drop bonds to 0.

Oh I didn know that,... is this doubly more so since I already have bonds in my Roth IRA anyway?

SuperSecretName

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Re: 29 and doing.. Ok? Advice, tips, suggestions appreciated
« Reply #15 on: May 02, 2018, 08:55:57 AM »
I think I'm still going to keep saving in some capacity and maybe have some sliver of hope?
Nope.  Decide what you want and then act accordingly.  Don't waffle.  By keeping up a sliver of hope, you are giving up tax advantaged space in your 401k.

I'll probably keep bonds at 5%.
Generally, < 10% won't make any difference and just makes things more complicated.  Drop bonds to 0.

Oh I didn know that,... is this doubly more so since I already have bonds in my Roth IRA anyway?
Yeah.  Personally, I'm 100% equities, with 40% international.

LG89

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Re: 29 and doing.. Ok? Advice, tips, suggestions appreciated
« Reply #16 on: May 02, 2018, 08:59:23 AM »
I think I'm still going to keep saving in some capacity and maybe have some sliver of hope?
Nope.  Decide what you want and then act accordingly.  Don't waffle.  By keeping up a sliver of hope, you are giving up tax advantaged space in your 401k. Hmm.. well I will definitely max out my Roth IRA since I can use it to pull 10k any time for a house if that decision ever comes. So, basically I need to decide between either bumping my 6% contribution to my 401k (no possibility of taking any amount out for a down payment) OR put that bi-weekly $400 into a brokerage account (to possibly plunder for a downpayment at a later date)? This may require me a bit more mulling. Only because all of my family and friends are here...

I'll probably keep bonds at 5%.
Generally, < 10% won't make any difference and just makes things more complicated.  Drop bonds to 0.

Oh I didn know that,... is this doubly more so since I already have bonds in my Roth IRA anyway?
Yeah.  Personally, I'm 100% equities, with 40% international.

I was at 100% before until someone advised holding some bonds. But since I have some in my Roth IRA, you're right may as well go whole hog with the 401k anyway. Appreciate your response, thanks!
« Last Edit: May 02, 2018, 09:09:55 AM by LG89 »

Freedomin5

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Re: 29 and doing.. Ok? Advice, tips, suggestions appreciated
« Reply #17 on: May 02, 2018, 09:07:53 AM »
If teaching yoga is something you want to do long term, I would focus on developing that as a side hustle. In terms of advertising for private clients, Iíve done the following (or known people who have done the following), and generally have been able to rustle up a few clients, though in a different field:

1) Post on Craigslist
2) Develop a cheap and pretty website
3) start letting all your friends/networks know you are accepting new clients
4) Offer the first session free
5) Post on community center bulletin boards, or supermarket community bulletin boards, or maybe even at nearby yoga studios(?)

LG89

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Re: 29 and doing.. Ok? Advice, tips, suggestions appreciated
« Reply #18 on: May 02, 2018, 09:11:47 AM »
If teaching yoga is something you want to do long term, I would focus on developing that as a side hustle. In terms of advertising for private clients, Iíve done the following (or known people who have done the following), and generally have been able to rustle up a few clients, though in a different field:

1) Post on Craigslist
2) Develop a cheap and pretty website
3) start letting all your friends/networks know you are accepting new clients
4) Offer the first session free
5) Post on community center bulletin boards, or supermarket community bulletin boards, or maybe even at nearby yoga studios(?)

Thanks Freedomin5. You're right, I should stop letting my anxiety and all the butwhatifthisorthats hold me back and just do something. I think you've given me some pretty actionable steps. I'll work on some standard langauge for a craigslist ad. And I think #2 should be fairly straightforward. But man do I have some analysis paralysis sometimes... always trying to make the "perfect" move and losing out to time when good enough works better.

This may not be relevant, if you do this full time. But do you (or anyone else reading this for that matter), have any advice on balancing full time work with a passionate/long-term side hustle?
« Last Edit: May 02, 2018, 09:15:25 AM by LG89 »

Freedomin5

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Re: 29 and doing.. Ok? Advice, tips, suggestions appreciated
« Reply #19 on: May 02, 2018, 09:57:51 AM »
Yes, Iíve been pretty lucky in that my FT job is quite flexible, so Iíve worked out a deal where I squeeze all my hours into 3.5 days.

Iíve found that being ďrigidĒ with when I do side hustle-related work helps. For example, Iíll only check my hustle email on Mondays and Wednesdays when I do hustle related work. I donít check that email on my FT job days.

I set aside ďblocks of timeĒ in my schedule just for the side hustle and I donít (or try very hard not to) do side hustle work outside of those blocks.

So if you work a typical 40-hour workweek you might decide to only have 5 clients max, and only on weekdays after work, for example. (Figure out a plan/schedule that works for you)

LG89

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Re: 29 and doing.. Ok? Advice, tips, suggestions appreciated
« Reply #20 on: May 02, 2018, 11:50:40 AM »
Yes, Iíve been pretty lucky in that my FT job is quite flexible, so Iíve worked out a deal where I squeeze all my hours into 3.5 days.

Iíve found that being ďrigidĒ with when I do side hustle-related work helps. For example, Iíll only check my hustle email on Mondays and Wednesdays when I do hustle related work. I donít check that email on my FT job days.

I set aside ďblocks of timeĒ in my schedule just for the side hustle and I donít (or try very hard not to) do side hustle work outside of those blocks.

So if you work a typical 40-hour workweek you might decide to only have 5 clients max, and only on weekdays after work, for example. (Figure out a plan/schedule that works for you)

Wow, that's awesome! I wish I could compress my time, but that's not going to be possible as a corporate drone unless my team moves to more remote work. Right now its so far only consistently once a week, any other time is by request which is usually honored but would be nice if it was set to 2 or 3 days consistently for the entire team.

Those are some great suggestions to keep in mind, I'll definitely have to put them into practice as I'm launching this private teaching. Focusing on just landing one client first.

Freedomin5

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Re: 29 and doing.. Ok? Advice, tips, suggestions appreciated
« Reply #21 on: May 06, 2018, 01:05:17 AM »
Yes, Iíve been pretty lucky in that my FT job is quite flexible, so Iíve worked out a deal where I squeeze all my hours into 3.5 days.

Iíve found that being ďrigidĒ with when I do side hustle-related work helps. For example, Iíll only check my hustle email on Mondays and Wednesdays when I do hustle related work. I donít check that email on my FT job days.

I set aside ďblocks of timeĒ in my schedule just for the side hustle and I donít (or try very hard not to) do side hustle work outside of those blocks.

So if you work a typical 40-hour workweek you might decide to only have 5 clients max, and only on weekdays after work, for example. (Figure out a plan/schedule that works for you)

Wow, that's awesome! I wish I could compress my time, but that's not going to be possible as a corporate drone unless my team moves to more remote work. Right now its so far only consistently once a week, any other time is by request which is usually honored but would be nice if it was set to 2 or 3 days consistently for the entire team.

Those are some great suggestions to keep in mind, I'll definitely have to put them into practice as I'm launching this private teaching. Focusing on just landing one client first.

Yes, I'm a corporate drone as well, but one that has very in-demand skills that very few people in the company have. I've tried to make myself indispensable to the company, so they need me more than I need them. That puts you in a position of power and gives you leverage.

Good luck getting your first client!

civil4life

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Re: 29 and doing.. Ok? Advice, tips, suggestions appreciated
« Reply #22 on: May 10, 2018, 11:15:39 AM »
My therapist told me the story of starting out on her own.  It was her own therapist that told her all you need is one client.  She ended up getting a referral from a friend.  She found a space that rented a room hourly and that is how she started.  This was in the 90s.  She now offers many services in her private practice and works a couple days a week through a doctors office.  That is where I saw her.

Another thing for yoga would be talking to Physical Therapists or Chiropractors.  The more holistic ones are willing to rent space and refer clients. 

I live in the DMV area but on the northern side of DC so most of my contacts are in the Columbia area or farther north.

Laura33

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Re: 29 and doing.. Ok? Advice, tips, suggestions appreciated
« Reply #23 on: May 12, 2018, 09:12:14 AM »
Couple of thoughts:

1.  If your "cap" approach works for you, go with it -- people are different, find what comes naturally to you.  But what I would suggest is building room under that cap for periodic large expenses.  I'm not talking about things like a sweater at a thrift store, but things like $2K+ car expenses, the gifts/clothes/travel that come along with weddings, and the like.  The reality is that right now, you are living successfully with an $1800 cap, unless you have a car repair, or something else happens.  But it's really an until, because those things are going to happen -- you're going to want to be able to give gifts, or fix an appliance that breaks, replace your car at some point, etc.  So since you know those things are going to happen, prepare for them by putting some money aside in advance (Michelle Singletary calls it a "life happens" fund).  Otherwise, your cap isn't really a cap; it's just a "normal expense" cap, and unusual events will consistently prevent you from reaching your goals.

2.  You have a serious choice to make between FI and home ownership.  The fastest, most efficient way to reach FI is to maximize your tax-advantaged accounts -- max out that 401(k), do an HSA if you have that option, and then max out the tIRA (if you qualify) or Roth IRA.  OTOH, if you want to buy a house, you need money accessible outside of your 401(k) for a downpayment.  And you don't make enough to do both.  So here's my suggestion:  the reality is that you can't afford a home at this point anyway, between your salary and the ridiculous housing market in NoVA, so you will either need a significant salary increase or to move to a LCOL area.  And if and when that happens, you will have more ability to save anyway.  So logically, your first job at this point is to max out that 401(k).  That will get you a great tax deduction that will lower your federal and state taxes, so you will be able to save more for the same hit to your budget.  It also helps that the money you put away at the beginning of your career has by far the biggest impact on your long-term finances, because it has the most time to compound.  So it makes total sense to front load tax-deductible retirement savings now, and worry about saving for a downpayment (which you don't want to invest in the market anyway) closer to the time you will be able to afford buying something. 

But psychologically, I know it may be difficult to feel like you're giving up on the idea of owning a home.  So if that is you, then why not dedicate your side hustle income to that purpose?  You could put that into a Roth, where it could both continue to grow if you don't need it and be available for a downpayment if you do.  And maybe that will also provide a little extra incentive to get that side hustle going!

LG89

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Re: 29 and doing.. Ok? Advice, tips, suggestions appreciated
« Reply #24 on: January 24, 2019, 05:17:23 PM »
Time for an update. Thanks for the replies and advice all!

I'm still doing the cap thing and it's working for me monthly spending is still tracking under $1800 and hitting closer to $1800 when I travel. Maybe I wasn't clear but there is plenty of room for 2k emergencies, that's what my savings are for.

Gross Salary/Wages
Annual: $68,243.76 In less than 12 months I've increased my salary by over 50%. I've jumped internally and will jump externally. I'm set to make 110k in 2019 by the end of next month. This includes my signing bonus. Base is over six figures.

Assets Total: $173k (does not include my checking account)
$10,100 (Ally savings - house downpayment)
$1,000 (Ally savings - general savings)
$117,300 (401k)
$41,000 (roth ira)
$958 (Wealthfront - added another $500 for a total of 1k, waiting out the market beating)
$3200 (finally got around to opening a brokerage account, put in 3k at the end of November)

Really happy I've pushed myself to get a better salary and hitting six figures before 30. I also decided to finish my master's and had to dip into my savings for that which is why it's decreased. I've also lowed my monthly rent. Surprisingly by moving closer in and it's now less than $1k a month for everything instead of $1.3k. I also haven't spent anything on gas due to the company paying for my metro card. This will change with the new job but it was nice saving while I could.

Still don't know what to do wrt buying a house but I'm not going to think much about it other than to keep saving and investing and crossing the bridge later. All savings will obviously increase with the larger salary. I think I'm on pretty solid and steady ground from here on out, I can weather the bumps and storms.

Here's to patience, determination, planning and certainly some luck! Woohoo!

civil4life

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Re: 29 and doing.. Ok? Advice, tips, suggestions appreciated
« Reply #25 on: January 24, 2019, 05:40:43 PM »
Awesome Update!

Any movement on yoga side job?

MrThatsDifferent

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Re: 29 and doing.. Ok? Advice, tips, suggestions appreciated
« Reply #26 on: January 25, 2019, 12:08:34 PM »
Congratulations, youíre doing great. Your current budget has you at an annual spend of $22k a year, which is around $550k that you need to be FI. It would seem youíre already a quarter of the way there!  Iíd review the investment order, look at maxing out your tax advantage accounts, and then getting the rest in the recommended index funds. Since you already know you can live off your current salary, be mindful of increasing your expenses to match your new salary. Iíd dump all the extra income into the savings/investment accounts and watch them grow quickly. Since you might end up FI quicker than you thought, maybe hold off on buying the house until you know exactly where you want to live after youíre FI? Good luck!

LG89

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Re: 29 and doing.. Ok? Advice, tips, suggestions appreciated
« Reply #27 on: January 27, 2019, 01:47:13 PM »
Awesome Update!

Any movement on yoga side job?

Unfortunately not! With grad school (3 classes each semester) I didn't really watch my health (on the fitness side) in 2018 and yoga just fell by the way side. Since I'm doing decently in my career I think I'm just going to table the yoga teaching for when I get closer to FI. Or maybe after I'm done with grad school (last semester now).

Congratulations, youíre doing great. Your current budget has you at an annual spend of $22k a year, which is around $550k that you need to be FI. It would seem youíre already a quarter of the way there!  Iíd review the investment order, look at maxing out your tax advantage accounts, and then getting the rest in the recommended index funds. Since you already know you can live off your current salary, be mindful of increasing your expenses to match your new salary. Iíd dump all the extra income into the savings/investment accounts and watch them grow quickly. Since you might end up FI quicker than you thought, maybe hold off on buying the house until you know exactly where you want to live after youíre FI? Good luck!

Thanks! Yes, I'm definitely holding off buying until I have more invested and have a much bigger cushion (barring unforeseen circumstances that would make a home a much bigger and reasonable want). I'm definitely saving the difference of the increased income.