Monthly | |||
Income Wife | $7,500 | ||
Income Me | $20,000 | ||
- | |||
Taxes (Fed, State, Payroll) | -$7,443 | ||
Medical Premiums | -$510 | ||
Life Insurance | -$170 | ||
- | |||
Expenses: | |||
Mortgage Interest | -$200 | ||
Mortgage Interest | -$200 | ||
Homeowners Association | -$50 | ||
Homeowner's Insurance | -$315 | ||
Property Taxes | -$440 | ||
Electricity | -$140 | ||
Natural Gas | -$80 | ||
Internet | -$110 | ||
Satellite TV | -$120 | ||
Garbage | -$33 | ||
Water | -$18 | ||
Housing Total | -$1,506 | ||
- | |||
Gasoline | -$225 | ||
Auto Insurance | -$150 | ||
Transportation Total | -$375 | ||
- | |||
Cell Phone Service | -$114 | ||
Grocery | -$580 | ||
Childcare | -$120 | ||
Clothes | -$75 | ||
Lawncare | -$100 | ||
Toiletries | -$40 | ||
Household Repairs | -$5 | ||
Haircuts | -$50 | ||
Out-of-pocket Healthcare | -$63 | ||
Non-Discretionary Total | -$1,147 | ||
- | |||
Eating Out | -$250 | ||
School Breakfast/Lunch | -$57 | ||
Kids Toys | -$5 | ||
Massage | -$65 | ||
Pet Expense | -$38 | ||
Online Subscriptions | -$46 | ||
Admissions/Recreation | -$275 | ||
Gifts | -$167 | ||
Vacations | -$150 | ||
YMCA Membership | -$60 | ||
Child Tutoring | -$250 | ||
Misc | -$25 | ||
Discretionary Total | -$1,388 | ||
- | |||
Dependent Education Savings | -$367 | ||
- | |||
Total Expenses: | -$4,783 | ||
Net Monthly Savings | $14,594 |
Assets: | |||
Taxable Investments | $627,101 | ||
Tax Free Investments (Roth) | $327,318 | ||
Tax Deferred Investments | $846,281 | ||
Health Savings(HSA) | $39,478 | ||
Total Invested Assets | $1,840,178 | ||
Primary Residence | $520,000 | ||
College Savings Accts | $80,486 | ||
Total Assets | $2,440,664 | ||
- | |||
Liabilities: | |||
Mortgage | $72,280 | ||
PV of College (discounted at 5%) | $89,521 | ||
Total Liabilities | $161,801 | ||
- | |||
Total Net Worth: | $2,278,863 |
We definitely did not always make the income we make today. Admittedly, I could have also done a better job of disciplined investing (my only financial regret). Here is my history (a couple of the latter year's income are just estimates as I don't have exact numbers in front of me now or the year is not yet finished). Never owned a new car. Never left the continent. Nothing extravagant. I actually think I have always had the MMM principles I have today (albeit less hard core). Interested to here your opinion.
Year Gross Income Net Worth
2009 173,854.72 400,100.94
2010 177,660.50 586,024.85
2011 219,361.48 694,708.64
2012 229,657.69 864,777.19
2013 221,876.40 1,154,641.80
2014 240,072.84 1,347,947.88
2015 282,088.32 1,457,597.88
2016 300,000.00 1,664,429.57
2017 325,000.00 2,062,703.00
2018 350,000.00 2,278,863.00
Just a quick a quick comment on the college savings. I agree with you that it doesn’t count towards your retirement savings, and therefore not towards your net worth for the sake of calculating whether you are FI, but it certainly isn’t a liability! It is a great thing that you set aside and use to find your kid’s education 8 years in the future. Are you trying to indicate that the amount you have saved is insufficient to the tune of $80k?
In our own calculations we don’t include the college savings accounts because they aren’t “ours”, but they certainly are not a liability.
Just a quick a quick comment on the college savings. I agree with you that it doesn’t count towards your retirement savings, and therefore not towards your net worth for the sake of calculating whether you are FI, but it certainly isn’t a liability! It is a great thing that you set aside and use to find your kid’s education 8 years in the future. Are you trying to indicate that the amount you have saved is insufficient to the tune of $80k?
In our own calculations we don’t include the college savings accounts because they aren’t “ours”, but they certainly are not a liability.
I think his intentions were to offset the asset column sort of like an accounts payable.
Other than that, here is a direct question that I can't get my habnds around. I would intend to live on the taxable accounts until we eventually reach 59 1/2 (16 years) or until the taxable account is exhausted. Is it reasonable to think that my tax bracket would be zero for any LT capital gains as long as I keep sales and other retirement income under $77,400 (2018 brackets). Or, should I be thinking of my $72k in living expenses as net after taxes... and I really need a larger number for my plan to work using the 4% rule.
You need to start looking into back door roth conversions. There is ways people have taken money out of the 401k earlier with no penalty
And last, before the numbers, would you guys still consider pulling the trigger with CAPE10 at the record-high levels we are at today?
You have a lot of fat in your budget and a decent net worth included a projected paid for house. You will be fine, question is though, will you be OKAY with cut backs if needed? This is a look in the mirror question nobody can answer for you.
A few comments about the numbers, before the numbers:
- We do a pretty good job of tracking/recording expenses. There is always some normalization in the numbers when trying to isolate a "normal" month, but I feel pretty confident in the numbers below.
- I assume everyone does this, but some things are obviously amortized over the year to compute a monthly number (gifts are mostly around christmas, travel is typically one time in the summer)
- I am tracking future dependent education expense as a liability in present value terms just because I don't consider that account to be savings that should contribute to my net worth since it is already comitted. Personal preference, IMO.
- I have not really done anything to adjust expenses for a post-FIRE lifestyle. I'm inclined to think that overall it would even out.
- For now, I am assuming we will drop most forms of life insurance (there are a few)
- I know there is some red meat for face punching to follow. But, life is about trade-offs, and I just hope most would agree that I am owning (and funding) my indulgences. But please, punch away I would get rid of the 170/month life insurance, if you die you have plenty of assets and SSI income to fall back on, you are making "DA MAN" rich with this...
Just a quick a quick comment on the college savings. I agree with you that it doesn’t count towards your retirement savings, and therefore not towards your net worth for the sake of calculating whether you are FI, but it certainly isn’t a liability! It is a great thing that you set aside and use to find your kid’s education 8 years in the future. Are you trying to indicate that the amount you have saved is insufficient to the tune of $80k?
In our own calculations we don’t include the college savings accounts because they aren’t “ours”, but they certainly are not a liability.
I think his intentions were to offset the asset column sort of like an accounts payable.
Just a quick a quick comment on the college savings. I agree with you that it doesn’t count towards your retirement savings, and therefore not towards your net worth for the sake of calculating whether you are FI, but it certainly isn’t a liability! It is a great thing that you set aside and use to find your kid’s education 8 years in the future. Are you trying to indicate that the amount you have saved is insufficient to the tune of $80k?
In our own calculations we don’t include the college savings accounts because they aren’t “ours”, but they certainly are not a liability.
I think his intentions were to offset the asset column sort of like an accounts payable.
You are definitely right and I should have been more clear (or really just less wrong) in my explanation. The college savings are on my balance sheet as an asset (as you correctly point out it should be). The PV of the future college expense offsets that as a liability (so you'll see it in liabilities too). (I develop/install accounting systems for a living and have probably absorbed too much). The end result is that my Balance Sheet equity section, which I think of Total Net Worth, does not include the college savings. Or better said, includes any shortfall/excess in that future obligation if there is any.
Just a quick a quick comment on the college savings. I agree with you that it doesn’t count towards your retirement savings, and therefore not towards your net worth for the sake of calculating whether you are FI, but it certainly isn’t a liability! It is a great thing that you set aside and use to find your kid’s education 8 years in the future. Are you trying to indicate that the amount you have saved is insufficient to the tune of $80k?
In our own calculations we don’t include the college savings accounts because they aren’t “ours”, but they certainly are not a liability.
I think his intentions were to offset the asset column sort of like an accounts payable.
I always did struggle with that particular concept in accounting. Perhaps that is why I am an engineer instead.
But then why not just not include the college savings instead of discounting it to present value and ending up subtracting more than is actually in that account today? ..... Never mind, it probably isn't important in the grand scheme of things.
Just a quick a quick comment on the college savings. I agree with you that it doesn’t count towards your retirement savings, and therefore not towards your net worth for the sake of calculating whether you are FI, but it certainly isn’t a liability! It is a great thing that you set aside and use to find your kid’s education 8 years in the future. Are you trying to indicate that the amount you have saved is insufficient to the tune of $80k?
In our own calculations we don’t include the college savings accounts because they aren’t “ours”, but they certainly are not a liability.
I think his intentions were to offset the asset column sort of like an accounts payable.
You are definitely right and I should have been more clear (or really just less wrong) in my explanation. The college savings are on my balance sheet as an asset (as you correctly point out it should be). The PV of the future college expense offsets that as a liability (so you'll see it in liabilities too). (I develop/install accounting systems for a living and have probably absorbed too much). The end result is that my Balance Sheet equity section, which I think of Total Net Worth, does not include the college savings. Or better said, includes any shortfall/excess in that future obligation if there is any.
How we doing compared to the fee based retirement counsel? Also, how much you pay? It's an anonymous board :) We can all laugh about it!
We definitely did not always make the income we make today. Admittedly, I could have also done a better job of disciplined investing (my only financial regret). Here is my history (a couple of the latter year's income are just estimates as I don't have exact numbers in front of me now or the year is not yet finished). Never owned a new car. Never left the continent. Nothing extravagant. I actually think I have always had the MMM principles I have today (albeit less hard core). Interested to here your opinion.
Year Gross Income Net Worth
2009 173,854.72 400,100.94
2010 177,660.50 586,024.85
2011 219,361.48 694,708.64
2012 229,657.69 864,777.19
2013 221,876.40 1,154,641.80
2014 240,072.84 1,347,947.88
2015 282,088.32 1,457,597.88
2016 300,000.00 1,664,429.57
2017 325,000.00 2,062,703.00
2018 350,000.00 2,278,863.00
From 2009 -2018 shows great net worth growth, probably to much to ask the savings % throughout the years, most of the net worth growth can be contributed to the market.
Nevertheless, you seem to admit that in the past the core principles of saving and investing were not always met. Do you feel more confident in your abilities now? Your net worth looks awesome, however being disciplined enough to not have W2 is all about controlling your expenses for the next 30+ years. Going from 330k/year to 60-70k is a big leap.
Also why do you have 2 mortgage interest line items?
Also, if your wife is retired why is there a line item for child costs albiet, it is very small for child costs.
Internet of 110/month is very high with the 120/month cable, there isn't a bundle in your neighborhood?
I am not going to go through the "Discretionary Total", this tells me you have a lot of fat if hard times would come through.
Off topic, are you in oil and gas? I connect Oklahoma with that industry and this pay.
Just a quick a quick comment on the college savings. I agree with you that it doesn’t count towards your retirement savings, and therefore not towards your net worth for the sake of calculating whether you are FI, but it certainly isn’t a liability! It is a great thing that you set aside and use to find your kid’s education 8 years in the future. Are you trying to indicate that the amount you have saved is insufficient to the tune of $80k?
In our own calculations we don’t include the college savings accounts because they aren’t “ours”, but they certainly are not a liability.
I think his intentions were to offset the asset column sort of like an accounts payable.
You are definitely right and I should have been more clear (or really just less wrong) in my explanation. The college savings are on my balance sheet as an asset (as you correctly point out it should be). The PV of the future college expense offsets that as a liability (so you'll see it in liabilities too). (I develop/install accounting systems for a living and have probably absorbed too much). The end result is that my Balance Sheet equity section, which I think of Total Net Worth, does not include the college savings. Or better said, includes any shortfall/excess in that future obligation if there is any.
How we doing compared to the fee based retirement counsel? Also, how much you pay? It's an anonymous board :) We can all laugh about it!
He actually just said it looked like I was doing fine and there wasn't much he felt he could do for me during the initial consultation. We really are nice people, so not sure why. Maybe my net worth was not high enough. But, there is literally only one fee-only adviser in my city. So after that, there were no other options.
We definitely did not always make the income we make today. Admittedly, I could have also done a better job of disciplined investing (my only financial regret). Here is my history (a couple of the latter year's income are just estimates as I don't have exact numbers in front of me now or the year is not yet finished). Never owned a new car. Never left the continent. Nothing extravagant. I actually think I have always had the MMM principles I have today (albeit less hard core). Interested to here your opinion.
Year Gross Income Net Worth
2009 173,854.72 400,100.94
2010 177,660.50 586,024.85
2011 219,361.48 694,708.64
2012 229,657.69 864,777.19
2013 221,876.40 1,154,641.80
2014 240,072.84 1,347,947.88
2015 282,088.32 1,457,597.88
2016 300,000.00 1,664,429.57
2017 325,000.00 2,062,703.00
2018 350,000.00 2,278,863.00
From 2009 -2018 shows great net worth growth, probably to much to ask the savings % throughout the years, most of the net worth growth can be contributed to the market.
Nevertheless, you seem to admit that in the past the core principles of saving and investing were not always met. Do you feel more confident in your abilities now? Your net worth looks awesome, however being disciplined enough to not have W2 is all about controlling your expenses for the next 30+ years. Going from 330k/year to 60-70k is a big leap.
Also why do you have 2 mortgage interest line items?
Also, if your wife is retired why is there a line item for child costs albiet, it is very small for child costs.
Internet of 110/month is very high with the 120/month cable, there isn't a bundle in your neighborhood?
I am not going to go through the "Discretionary Total", this tells me you have a lot of fat if hard times would come through.
Off topic, are you in oil and gas? I connect Oklahoma with that industry and this pay.
My regret is not having enough in the market in 2009/2010 after the financial crisis. But, I am pretty confident in our spending.
Two mortage interest lines was an oversight.
The childcare is not forward looking. But, you are right, it will end now.
I got no good answer on the cable/internet :) You are right there too.
I work peripherally in oil and gas. A software company that services oil and gas companies.
If a financial advisor is something you would really like to take a last look before you pull the trigger, you certainly are not limited to the only one in your town. The Garrett Planning Network and XY Advisors are fiduciary advisors who can do virtual consultations. I am looking into whether one might be a good fit for us as well for a second set of eyes on our plan. The other thing I have toyed with is Root of Good who does retirement consulting on the side. https://rootofgood.com/early-retirement-consulting/ (https://rootofgood.com/early-retirement-consulting/) I have no idea how qualified he is in the details, but he is living the FIRE life that we all aspire to, so he at least understands the nuances of our particular situations, which is more than most financial advisors are likely to get.
Other than that, here is a direct question that I can't get my habnds around. I would intend to live on the taxable accounts until we eventually reach 59 1/2 (16 years) or until the taxable account is exhausted. Is it reasonable to think that my tax bracket would be zero for any LT capital gains as long as I keep sales and other retirement income under $77,400 (2018 brackets).for clarity to others, you are filing MFJ. So, the answer is yes
Other than that, here is a direct question that I can't get my habnds around. I would intend to live on the taxable accounts until we eventually reach 59 1/2 (16 years) or until the taxable account is exhausted. Is it reasonable to think that my tax bracket would be zero for any LT capital gains as long as I keep sales and other retirement income under $77,400 (2018 brackets). Or, should I be thinking of my $72k in living expenses as net after taxes... and I really need a larger number for my plan to work using the 4% rule.
You need to start looking into back door roth conversions. There is ways people have taken money out of the 401k earlier with no penalty