Hi there!
I just discovered the MMM community because of a friend at work, and I'm really excited to participate in the forum! I'm a bit nervous about sharing these details, since I'm generally a very quiet and private person. I changed a few small details, and rounded the numbers, to protect my identity. I have an embarrassment around talking about my financial status, mostly because I don't want my family to know.
Me:
I'm 29 years old, and I work and live in San Francisco bay area. I live with my gf and 2 dogs. We split costs - (the gf and i, not the animals!) I basically have no hobbies and work all the time, though I'm trying to change this. We live only 25 miles from our offices, but have to commute about 2 hours each way because of traffic. Moving closer will increase our rent significantly. (See numbers below). We plan to be engaged soon.
Background:
Immigrant secular family, moved to the US from lithuania when I was younger with my grandparents and parents. We grew up quite poor due to various bouts of unemployment, sickness, unexpected bills. Father died from a quick and unexpected illness when I was in high school. Mother is basically revenue neutral and unemployed. Grandmother is very sick, and has been for a long time. Grandpa is gone. Siblings are in a lot of debt. (I paint a grim picture, but... everyone who is still around is positive, happy, and supportive! We all speak regularly.)
I graduated in with over $150,000 in student loan debt, ranging from 3% to 12%, and a savings of $1,500. I chose a career in tech, even though I graduated with a useless degree in history from a good uni in NYC. I worked full time in college (40 hours a week) in science labs and as a TA, which is how I paid the other 50k of my tuition over 4 years.
All of my financial knowledge is self taught over the course of the past 18 months or so. Prior to that, I was financially illiterate and was mostly hoarding cash (and I still mostly am!) I've been researching mostly investments, retirement accounts, and so on.
My Career:
I started out as a contractor fixing corporate environments/networks/printers, etc. for $40,000 per year, and currently make ~190,000 almost 8 years later as a self-taught software engineer (base 120k). I currently work for a large tech company, (similar to FAANG and also in silicon valley). I've been at my current company for 4 years. My salary has increased approximately 20,000 per year since I started there through various job changes, promotions, etc. I do not expect this trend to continue. I also have serious imposter syndrome at work, which may bleed into preventing my advancement further. I don't plan on leaving the company where I currently work. We don't have free lunches, but the people are very nice and that means a lot to me.
My Partner:She is a mixed media artist and contracts throughout SF bay. She has a savings she doesn't have to dip into with an emergency fund, but doesn't save much beyond that. She had one large inheritance and has never spent it. After all is said and done, she probably can save 5-10k a year. I don't want to derail the conversation by focusing on her finances. We'll cross that bridge when we get there and I don't want to rush into it.
My philosophy:
I don't believe in making my life uncomfortable in order to skimp pennies here and there. I do believe in paying yourself first, I don't have a set "FIRE" date or value, though I intend to "work" even after I reach that point. I think living a balanced life without excess (my apartment is not fancy, we share a car, and we don't buy lots of frivolous items, perhaps, other than food). We like to see the world and travel once or twice a year internationally, usually as part of a business trip (i.e. one of us goes for work, and the other tags along.)
My goals:
Honestly, I just don't want to raise kids in the type of environment that I grew up: a tiny, cramped apartment with 6 people. parents working long hours when they had any work to begin with.
Longterm, I'd like to one day buy a house with a yard, though probably not in the SF bay area, preferably near NYC to be nearer to my family upstate. I'd also like to support my gf in her desire to leave corporate life in order to pursue a career in artistry. In my family life, I'd like to have a few children. Financially, I'd like to have 1 million net worth within 2-3 years. I'd also like to purchase an investment property within 1-3 years, though I don't see it as feasible within the bay area right now. Within 12 years, I'd like to have 5 million net worth.
These goals are quite lofty and I think they're probably not possible, but I plan to aim high and hopefully be closer to my goals than if I aimed low. I'm having trouble visualizing myself getting there - my numbers just don't add up. Even if I "trim some fat" and save another 5k a year or so, will that really help me get to the millionaire goals I dream of?
some discussion questions that run through my mind daily:- Are my goals unrealistic? What would more realistic goals be?
- Is there anything you would do differently in my shoes?
- Are there better places to put my money? (other kinds of investments, etc?)
- I don't have a financial advisor, should I get one?
- Am I doing anything horribly wrong?
- Am I doing anything right? (I don't need backpats, but it would be good to understand what's right/wrong so I don't cancel this habit.)
- How do I help my family while also looking after my (and my future family) financial future? (I usually only help out around christmas time by playing santa claus. I buy them gifts that I've heard them say they need/would like throughout the year... such as snowblowers, remote starters, cell phones, clothes, and so on). I would love to help them throughout the year, but my siblings would likely would *never* accept a gift or money outside of christmas - they are too proud. My mother wont accept financial assistance (though she will accept financial advice), and my siblings won't accept advice or assistance - though they do sometimes let me pay for dinner.)
- How should my gf and I talk about money prior to getting engaged?
- I'm new, learning, and open to any and all advising!!
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I updated the numbers here: https://forum.mrmoneymustache.com/case-studies/first-time-poster-just-discovered-mmm-not-sure-how-to-reach-lofty-goals/msg2830029/#msg2830029 ~~~~~~~~~~~~~~~~~~
THE NUMBERS:
The numbers below are slightly rounded (some higher, some below) in order to help protect my anonymity.
Current gross annual income:
- Base pay:120k
- Vesting Equity: ~50k
- Bonuses: annual 15% + a few grand here and there for being an oncall engineer. (Let's call this 36,000 annually)
- - Total annual income: 206,000
~~~~~~
Current Regular Paycheck Allocation (every 2 weeks), rounded:
- income: 4,500
- mobile phone/internet reimbursement: 40
deductions:
- 401k pretax: ~700 (18k per year, with company match, this turns out to be about 25k per year. Next year I plan to put 100% of my bonus in it until it maxes out so this will go down to 0).
- 401k aftertax, then 401k roth rollover: 70
- HSA: 50
- vision: 2
- dental:5
- life insurance: 10
- legal plan: 20
taxes:
- federal income tax: 750
- medicare: 100
- CA income tax: 275
- social security employee tax: 300
- private disability: 40
Money left over from every check (every 2 weeks): ~2,175
~~~~~~
Other annual income, paid/vesting irregularly:
Equity:
- 12,500 every 3 months, after tax about 8,000
Bonuses:
- 36,000, after tax about 27,000
~~~~~~
Bills monthly:
- Rent: 3,500/2 = 1,750 (moving closer to work with our housing requirements would cost about 5,500/mo for the same amount of space).
- Water/Sewer/Gas/Electric: 400/2 = 200
- Car Insurance: ~100 (we share one car, paid off)
- online subscriptions (netflix, etc.): 50
- top-of-the-line pet insurance (literally everything is covered...): 100/2 = 50
- doggy daycare: 600/2 = 300 (This turns out to be cheaper since one of us can work from home every once in a while and don't bring the dogs to daycare on those days... we can't bring the dogs to work).
- pet things (food, vet, medicine, etc.): 150
- food: 400/2 = 200 (we eat out a lot because we don't have time to cook/shop due to commute times - about 2 hours each way, sometimes driving and sometimes on a train/bike/bus).
- regularly scheduled flights to my mother/grandmother, average: 200/mo
- Other things: 200 avg
total approximate monthly bills: 3,200
~~~~~~
How I divy out my savings:
"pay myself first" (not including 401k):
- 400 per week into robo investor
- 400 per week into personal savings
- joint savings with gf: 100
- savings per month: 3,300 between these two accounts
~~~~~~
Monthly financial allocations:
Monthly paycheck income: 2175*2 = 4350
bonuses: 27,000/12: 2,250/mo
subtract:
"pay myself first": 3,300
bills: 3,200
leftover: 100 spending cash
~~~~~~~~~~~~~~~
Personal Net Worth:Approximately
$515,000 USDBreakdown of current assets:
Debt: 0 (just paid off the car that we share, and paid off student loans a few years ago).
No long term debt as of 2.5 years ago. Pay CC bill in full every month.
Cash:
CD (1.5%), 4 months to maturity: 25,000
Bank Accounts (cash, including emergency fund): 25,000
Total Cash: 50,000
Investments:
Personal Investment Account (about 3-5 unique stocks at a time): 190,000 (30% unrealized gain in 2 years)
Vested Corporate Equity through my job: 120,000 (45% unrealized gain in 4 years, all dividends are DRIP) - i have never sold work equity
Roboinvestor: 40,000 (25% unrealized gain in 10 months)
Total: 350000
Note: Current unrealized gain from the above total (taxable upon sale): 120,000
(realized short term gains so far this year: 7,000, realized losses: 3,000)
Retirement:
401k (both pre+post tax): 115,000
HSA:
2,000 (non-invested)
TYVM for your advising!p.s. please excuse my blunt responses, I am aware of them - they are cultural and I do not mean to be curt or rude. I am trying to adopt more "american" nonchalant responses - english is my second language :).