Hi
I've been dreaming of Fire at around the age of 50. I'm currently 45 year old happily single mom. I live in a duplex I own(with lots of help from the bank) in san francisco.
That quite the goal. Nice. :)
Income
1. w2 net 12500 per month after taxes, insurance, deductions
deductions: includes maxed 401k 18500 a year match is 100% of contribution but vesting won't happen for another 5 years so I don't count match,
5,000 in dependent care fsa I currently pay 1700 per month for preschool. Likely will go down to 300 a month when my daughter starts public school
250 in medical care fsa
2. rental income 2500 per month
3. I'll have a pension 1300/month at age 60 or 200,000 to roll in ira, I anticipate i'll get max social security at 67
Your income is EXTREMELY solid, including that duplex/ownership. That was a good move and should add some mobility in FIRE. (Image a 5000$ a month steady income, banking on 90% occupancy since its bay area... You might already be FIRE'd)
expenses
1 Housing 4270
Mortgage 2750/month 585,000 @ 3.825 refinanced last year with 29 years left
Thats a great rate. I would reccomend holding it and going taxable BEFORE paying any extra... In other words, don't pay early (In My Opinion). See below.
... Don't pay off the mortgage calc (click above to go there)
normal...
normal...
normal... (we'll excuse the entertainment since you have high income + decent moneymaking strategies with duplex... but it really belongs under "entertainment")
amazon prime/netflix 25/mon i still get dvds delivered a few x a month
...
2. auto 275/mo Honda civic 2014 I own outright
gas 90/month I work 5 miles from my house but I have to drop off my daughter so public transit/biking tough + hills kill like this will go down to 20 a month is retirement
HOLY GUACAMOLE BATMAN!!!! WHAT ARE YOU SPENDING 275 A MONTH ON WITH A PAID OFF MUSTACIAN CAR LIVING SOOOOO CLOSE TO WORK?!?!?!!?!!1!!?!!1!!
But seriously, what is this? If you own your car outright, I'm not sure what this is going towards? Parking? Oil Changes? Getting 3 details a day? (kidding)
I'll grant you 100$ a month toward insurance... But 90$ per month on gas in a 2014 Civic with 34 miles per gallon at $3.50 is... 900 MILES A MONTH plus Stealership oil changes!
While your income is high and this isn't a **terrible** car cost, 900 miles a month is still a ton only living 5 miles from work. Work on that some (more for your sanity) and it'll help a little.
insurance 1200 a year
repair car 600 a year I still go to dealer for oil changes
misc 35 parking tickets, parking meters, etc, public transit
3. other expenses 3153
groceries 380 we eat organic but I could cut back a lot
I actually like this.
As long as you are not throwing away food a home, a high grocery budget is generally considered acceptable around these parts, though if you are only feeding two, this could come down to about $240 pretty easily, and $180 with strenuous effort. You pick your poison, but don't rely more on restaurants or prepared food in exchange for a lower grocery bill...
Speaking of which...
eating out 120 My fav restaurant is chipotle despite food poisoning risk but we love thai, burmese food but this can be cut
Is this going out 1x month, 2x a month or more? Does this include fast food? Just you and the daughter? All useful questions since this *seems* high but really might not be.
Also... Is this accurate?
Did you use mint or YNAB? I see below that you used mint. Across how many months have you been tracking?
entertainment 10 we're a library kinda family
travel/vacations 250 usually 1 cruise a year with family + 1 trip in december to see family members
gym 88
donations 500
kids activities 100 ( piano, dance, swim) kids are expensive!!! our gym is ymca so all kids activities are discounted
clothing/misc 5 we use second hand places, consignment to keep this down
child care 1700 I anticipate going down to 300 when she starts regularly elementary. Ill likely keep her in an after school program as they tend to be where most of the enrichment activities happen in sfusd. it will also go down another 500 a month in 9/18 when she qualifies for preschool for all grant.
total current expenses 7698. In retirement I'm anticipating 6795/mo retirement need (-1400 delta childcare,-70 delta gas,-400 delta home repair +health insurance(350) and +taxes(10%). My rental is rent controlled so unless my tenant moves out I'm at the rate of inflation in terms of income growth. So I figure 52550 a year after rental income is what i'll need from my investments to cover my expenses.
Liabilities
Mortgage 579000 @ 3.825
403b loan 23000 @ 4.25 that i used for down payment of home. one of my financial goals this year is to pay this off.
credit cards 0. I make about 30-50 a month on cash back from credit cards and charge everything and pay by end of month
Assets
401k current job 16k +18.5k a year until fire
403b old job/side job 197k ending 2018 + I'll add 23 k for 403b loan repayment this year
457 old job/side job 49k ending 2018
dcp old job/side job 52k ending 2018
roth ira 101k
saving /checking 10k my goal around 36k which I will complete in 2018
investment account 15K + I'll add 3k a month in 2018 barring any unexpected expenses.
529 31K + 500/month until fire
rollover ira 49k
total 489k not including 529
Home Equity 1,200,000 million value - 579,000 mortgage=621000
we live in lower half of duplex and rent upper half. I track our expenses on mint. So far we have so much depreciation on our duplex that I haven't owed taxes on income i draw from it nor will I until another 10 years per my accountant.
Home repair will likely go down to 50-100 per month. I'm planning on replacing hvac and roof as well as rewiring house prior to FIRE(lol freudian). I'll likely get rewiring and HVAC done this year. roof is in fair shape its just old (35+years)- no leaks. roof inspector earlier this year suggested I just ride it out until i notice a leak. I have a 20k line of credit at my credit union just in case I need it for major repairs at 7.75% but there is no fee to maintain credit line.
All this to get down to the following:
Expenses at FIRE stage (assuming you keep the mortgage as you should and she starts elementary):
2750 a month mortgage (keep it)
685 a month property taxes
120 a month property insurance
75 a month maintaining property
245 a month utilities (this seems high)
- (netflix/etc should be in entertainment not housing...)
275 a month car expenses (BRING THIS DOWN)
450 a month food (including eating out, so keep it to 2x a month)
30 a month entertainment (including netflix / a-prime)
0 a month for vacations.... YOUR LIFE CAN BE A VACATION, (see travelling slowly and not consuma sucka vacations in the forum)
0 a months for the gym (unless this is the YMCA, but it seems high). The Y should have a gym and barbells are cheap. :)
500 a month donations (is high for a FIRE person with negligible income, reduce as you see fit at FIRE)
100 a month for the kiddo can come down... There are more creative ways to do (some) of the activities. You don't need a grand master pianist, give a local college kid (music major) some side cash and cut the cost in half. Dance is just expensive, no way around that I can tell. Swimming can be cheap... Find a team with no membership fee that uses a local pool and pay the club fee for the pool. Usually cheaper. If the swimming is more than 5$ a month for coaching and 15$ a month for access, then you should check around. Kids are often an excuse to be a consuma sucka. Something to consider...
0 a month childcare. She starts school and you no longer work. maybe 20$/40$ a month for a babysitter if required.
All of that totals 5230$ a month or 62760 a year...
Assuming the rental is filled 11/12 months a year, that comes down by 27500 (assuming the rental is gross profit and you are including the rental costs in your personal figures). New annual total = 35260 (and that includes a 1/month buffer plus extra spending that you could remove)
You need a stash of $881,500 excluding equity (though that is another safety-margin for the what-ifs)
You have $489,000 invested.
You are $392,500 away from FIRE with the expenses outlaid above.
Honestly... You are making
150k A FRIGGIN YEAR (Talk about a fire-hose of money!)
You shouldn't be aiming for age 50, you should be aiming for end of 2018 to mid 2019!If your daughter is 3 now, that 31k (which will be increased by 7500 by FIRE date in 15 months) will be worth
$110,008.49 at age 18. Not to mention, if you just work
1 EXTRA MONTH at
12500, then it would be worth
145,725.54 at age 18. She is taken care of already (or darn near close to it!) Get the 529 to 50k and let it ride.
You can Pre-fire now if you wanted too, but it risks not turning that fire-hose of cash back on so I wouldn't recommend it, but you can definitely FIRE before school even begins. And if you want to work past that, or build a FIRE plan that involves gradually stepping down and making less money, by the time you're 70 you should have over 2.5MM digits in the bank. If you work for 5 more years, you would have over 10MM in the bank.... Surprise, you are already rich and can FIRE really REALLY soon if its a priority for you.
It would appear you have avoided the most hair-on-fire cringe-worth mistakes of high volumns of high interest dept. Thank your former self, because thats largely why you are where you are (unless you dug out of that situation, in which case double kuddos to you).