Author Topic: Speed me up  (Read 2578 times)

walkwalkwalk

  • Stubble
  • **
  • Posts: 170
Speed me up
« on: January 19, 2019, 07:50:53 PM »
Topic Title: Speed me up

Life Situation: Single (live with parents), 29 years old, no dependents, and living near Dallas, TX

All figures listed below are monthly (adjusted for biweekly, so average income)

Gross Salary/Wages: $4,167

Pre-tax deductions:

Health Insurance: $271.91
SIMPLE IRA: $325

Adjusted Gross Income: $3570.09

Taxes:

Fed: $290.49
State: N/A (TX has no state income tax)
Soc Security: $258.35
Medicare: $60.42

Total Taxes: $609.26

Adjusted gross income less taxes: $2960.83

Current expenses:

Auto Insurance: $100.00 (note that I pay this upfront 12 months at a time, however this would be the monthly cost)
Gas: $100.00 (42 mile round trip commute)
Tolls: $15 or less (the route I take now doesn't require but a few cents in tolls most days)
Auto Repairs: $100 (2004 used Lexus bought last August when someone totaled my last car)
Rent: $400.00 (includes being on cell family plan and Netflix provided through the carrier)
Groceries: $100.00 
Dining Out: $70.00 (this includes coffee, eating out, etc.)
Personal Care: $18.00
Gambling: $250.00
Gifts: $25.00
Medical: $350 (this will be average/mo for the year as I will hit max out of pocket)
Continuing Education: $70 (average/mo since my employer only pays for my CPA license and one 16 hour course)
Redbox (DVD rental): $10 or less (most times I get a code for a free one but sometimes I'll pay)

Total Monthly Expenses: $1,608.00

Assets:

SIMPLE IRA (old): $21,555.99 (at Edward Jones in the process of rolling over to Pioneer soon, yes I know both of them have bad fees but I could only roll it over to another SIMPLE IRA so I am stuck with it for now)

SIMPLE IRA (new): $153.83 (just started contributing at new work's plan with Pioneer investments)

Vanguard (roth IRA): $21,461.07

Vanguard (trad. IRA): $11,645.25

Vanguard (brokerage): $2,999.99 (just moved this over)

Groundfloor: $1000 (just doing this today actually, yes I know could end in no repayment but I think its fun)

HSA: $6,736.12 (I use this for all of the medical expenses, yes I know it could be better to save and only use later on once retired, but this is what I am going to do)

Checking Account $783.30

Savings: $10,627.94 (2% at Capital One - have $350/paycheck going here)

Total Assets: $76,963.49

Liabilities:

Credit Card charge some of my monthly expenses and pay off in full every month

Total liabilities: $100 currently

Specific Question(s):

I am a Certified Public Accountant (tax) going into his 6th busy season. Currently working at a tax and bookkeeping place making 50k/yr, just started last July (late July 2018). Looking for advice on increasing income, and no I cannot do a side gig. Eventually I want to be self employed, my main concern is health insurance (obviously, reading into my expenses above).  I think my main problem (ever) getting to FI is the income side of the equation, however I could try and cut back some on expenses possibly.

The $350/paycheck (26 paychecks a year) going to my savings account is for a downpayment on a house. I just feel it would take awhile to get there (to a 30% downpayment) at that rate. So I guess the question is whether to increase amount per paycheck going here or keep doing taxable account contributions? (maybe both but less per month to taxable while still increasing amount per paycheck to savings)

If there is anything that is formatted weird, or you would like me to provide additional information just let me know.

Feel free to share any and all advice/criticisms.
« Last Edit: January 22, 2019, 01:04:42 PM by walkwalkwalk »

lampstache

  • 5 O'Clock Shadow
  • *
  • Posts: 96
  • Location: Minnesota
Re: Speed me up
« Reply #1 on: January 19, 2019, 08:04:26 PM »
Sent you a PM.

lhamo

  • Walrus Stache
  • *******
  • Posts: 9002
  • Location: Seattle
Re: Speed me up
« Reply #2 on: January 19, 2019, 08:15:10 PM »
$200 a month going to gambling may be entertaining, but it is also kind of stupid.  It's also nearly 12.5% of your monthly expenses.  Plenty of room to cut back there.  Find a hobby that earns you money rather than throwing it away. 

JCGreen

  • 5 O'Clock Shadow
  • *
  • Posts: 53
Re: Speed me up
« Reply #3 on: January 19, 2019, 08:56:12 PM »
Hi Speed me up- Welcome to the forum

First off, you are doing a better job than most at saving money. For proof just look at the asset column.

A few ideas (as we can all improve):
It might help to clarify the goal(s) you want to achieve.  You stated you want to buy a house, but did not specify the proposed purchase price of such a house. Would you like to be Financial independent (FI) as well? You seem to be saving heavily in retirement accounts that will allow you to do that. It can help if you list out how much money you will need for each goal, how long you want to take (realistically) to get there, and calculate your savings rate needed from that.

As for where to invest? I recommend looking at the investment order thread in Investor Ally. If your goal is FI, it is the best place to look for where to invest money: https://forum.mrmoneymustache.com/investor-alley/investment-order/

You can remove money from retirement accounts to fund housing purchases, I am sure as a CPA you are knowledgeable about this, but I think (its been a while) you can only fund 20% of the home purchase price with Roth money.  401K withdraws are generally considered loans.

The non-necessities (entertainment) spending could go down to help you achieve FI or home purchasing sooner. That being said, if I lived with my parents, I would probably gamble/drink too.  Your auto insurance seems a little high especially for the age of the car (I have a 2002 toyota camry am 24 year old female and a little less than $50 a month). It would be worth looking into.

As for making more money, how do you intend to do so? You stated you are not interested in a side hustle, so are you looking for a new job or to start your own business? Another job may pay better and/or provide better medical benefits, but it doesn't sound as if you have been at your current job that long. You could also save up money and start your own accounting business? In the long run it could be more lucrative than buying a house. Health insurance can be bought on the exchange and its cost is based on your income.  Another option is switching careers entirely, but that is not a path you have suggested interest in.

At the end of the day, decided what you want, then go get it.

reeshau

  • Bristles
  • ***
  • Posts: 329
  • Location: Dublin, Ireland
Re: Speed me up
« Reply #4 on: January 20, 2019, 02:26:41 AM »
SIMPLE IRA (old): $21,555.99 (at Edward Jones in the process of rolling over to Pioneer soon, yes I know both of them have bad fees but I could only roll it over to another SIMPLE IRA so I am stuck with it for now)

Vanguard offers SIMPLE IRA's.  You do not have to roll over to your new employer's plan.

walkwalkwalk

  • Stubble
  • **
  • Posts: 170
Re: Speed me up
« Reply #5 on: January 20, 2019, 09:26:44 AM »
SIMPLE IRA (old): $21,555.99 (at Edward Jones in the process of rolling over to Pioneer soon, yes I know both of them have bad fees but I could only roll it over to another SIMPLE IRA so I am stuck with it for now)

Vanguard offers SIMPLE IRA's.  You do not have to roll over to your new employer's plan.
How exactly would I start a SIMPLE IRA at Vanguard without an active business that makes money? Sorry that doesn't make sense. Unless you meant I should convince my employer to switch to them?
« Last Edit: January 20, 2019, 09:28:25 AM by walkwalkwalk »

Tuskalusa

  • Bristles
  • ***
  • Posts: 322
Re: Speed me up
« Reply #6 on: January 20, 2019, 09:32:15 AM »
Your salary seems low for an experienced CPA. Have you looked at other (possible higher paying) opportunities?  Could you move from a firm to a finance team in a large business, for example? 

reeshau

  • Bristles
  • ***
  • Posts: 329
  • Location: Dublin, Ireland
Re: Speed me up
« Reply #7 on: January 20, 2019, 11:54:05 AM »
SIMPLE IRA (old): $21,555.99 (at Edward Jones in the process of rolling over to Pioneer soon, yes I know both of them have bad fees but I could only roll it over to another SIMPLE IRA so I am stuck with it for now)

Vanguard offers SIMPLE IRA's.  You do not have to roll over to your new employer's plan.
How exactly would I start a SIMPLE IRA at Vanguard without an active business that makes money? Sorry that doesn't make sense. Unless you meant I should convince my employer to switch to them?

I am suggesting you do a rollover from your old employer to Vanguard, rather than rolling it into your new employer's high-fee custodian.  You can't contribute more to it (without your own company) but it would otherwise work just like a 401k rollover to an IRA.  Just call them or search for the form on their website.

walkwalkwalk

  • Stubble
  • **
  • Posts: 170
Re: Speed me up
« Reply #8 on: January 20, 2019, 12:47:13 PM »
SIMPLE IRA (old): $21,555.99 (at Edward Jones in the process of rolling over to Pioneer soon, yes I know both of them have bad fees but I could only roll it over to another SIMPLE IRA so I am stuck with it for now)

Vanguard offers SIMPLE IRA's.  You do not have to roll over to your new employer's plan.
How exactly would I start a SIMPLE IRA at Vanguard without an active business that makes money? Sorry that doesn't make sense. Unless you meant I should convince my employer to switch to them?

I am suggesting you do a rollover from your old employer to Vanguard, rather than rolling it into your new employer's high-fee custodian.  You can't contribute more to it (without your own company) but it would otherwise work just like a 401k rollover to an IRA.  Just call them or search for the form on their website.
I wasn't in my SIMPLE for 3 years(this is the required minimum time to roll over to an non SINPLE IRA) -long story. But thanks for the thought.

Nick_Miller

  • Pencil Stache
  • ****
  • Posts: 804
Re: Speed me up
« Reply #9 on: January 21, 2019, 07:11:27 AM »
OP, first of all, I think you're in pretty good shape for your age with no debts and some decent investments! So congrats! Obviously expenses will go way up when you move out into a home, so yeah I agree with the others about chopping down the entertainment. Right now, you're in the best/easiest position you might ever be in to just save save save save save since you're just paying $400 for rent and phone.

You sorta did a preemptive strike with your "no, I can't do a side hussle." Did you mean in accounting, or period? May I ask why? Is it a contractual issue with your employer, or do they work you 70 hours a week, or is it something else?

I ask because my default advice to you would be to "work more/make more money," especially since you're a young single person. That advice is not as easy to put into action when you're older with dependents.

Jim Fiction

  • Stubble
  • **
  • Posts: 125
  • Location: Connecticut
Re: Speed me up
« Reply #10 on: January 21, 2019, 08:36:15 AM »
Topic Title: Speed me up

Life Situation: Single (live with parents), 29 years old, no dependents, and living near Dallas, TX

Specific Question(s):

I am a Certified Public Accountant (tax) going into his 6th busy season. Currently working at a tax and bookkeeping place making 50k/yr, just started last July (late July 2018). Looking for advice on increasing income, and no I cannot do a side gig. Eventually I want to be self employed, my main concern is health insurance (obviously, reading into my expenses above).  I think my main problem (ever) getting to FI is the income side of the equation, however I could try and cut back some on expenses possibly.


You seem under-employed. How long have you been a CPA? You mentioned you have been in your current position since this past summer, what does your previous experience look like? I am also a tax professional, though I am not a CPA. I was at a large regional firm, but I just left public for a position in industry. I saw a 25% bump in income when I made the switch.

harvestbook

  • Stubble
  • **
  • Posts: 136
Re: Speed me up
« Reply #11 on: January 21, 2019, 04:24:49 PM »
$200 a month going to gambling may be entertaining, but it is also kind of stupid.  It's also nearly 12.5% of your monthly expenses.  Plenty of room to cut back there.  Find a hobby that earns you money rather than throwing it away. 
I really am trying to cut back. I understand how dumb it is. I guess if I cut it in half then I would have 3% more net income.

Wow. $2400 a year on gambling. Over four years invested, that's more that $10,000. Sounds like a nice chunk toward the down payment of a house.

I probably drank up that much when I was an active alcoholic rather than in recovery.

patrickza

  • Pencil Stache
  • ****
  • Posts: 539
  • Age: 40
    • The Investor Challenge
Re: Speed me up
« Reply #12 on: January 22, 2019, 02:29:49 AM »
I see gambling is now missing? Knitting is very high. I assume this is some type of hobby, but what happens to everything that gets knit? At that price tag surely your room is overflowing with knitted goods by now!

Could you sell some of them?

2Birds1Stone

  • Walrus Stache
  • *******
  • Posts: 5053
  • Age: 31
  • Location: Earth
  • K Thnx Bye
Re: Speed me up
« Reply #13 on: January 22, 2019, 04:49:25 AM »
I would say your knitting habit can go. Otherwise decent shape.

I echo looking at the market value for a CPA with your experience, the pay sounds low(ish), even for TX.

walkwalkwalk

  • Stubble
  • **
  • Posts: 170
Re: Speed me up
« Reply #14 on: January 22, 2019, 01:02:53 PM »
I see gambling is now missing? Knitting is very high. I assume this is some type of hobby, but what happens to everything that gets knit? At that price tag surely your room is overflowing with knitted goods by now!

Could you sell some of them?
Haha you caught me. I bet on grandmas knitting. Just kidding. Sorry for being a troll. I will cut back on gambling and knitting and gambling on knitters.

Boofinator

  • Bristles
  • ***
  • Posts: 456
Re: Speed me up
« Reply #15 on: January 22, 2019, 01:22:24 PM »
How much time do you spend on your gambling habit hobby each month?

Could you break it out into two categories? (1) Actual time spent gambling (including ancillaries like travel time) and (2) Time spent earning the money to cover the costs (at most your total costs divided by your hourly wage less taxes).

Granted, these are hypothetical questions, but something to consider when choosing one's hobbies.

FreeBear

  • 5 O'Clock Shadow
  • *
  • Posts: 26
Re: Speed me up
« Reply #16 on: January 22, 2019, 10:08:40 PM »
Nice job with the savings and a solid career choice financially!  My thoughts regarding hobby spending, car insurance, and career compensation match those of many earlier posts, so I won't rehash.

My main thoughts pertain to your plans to buy a house.  I'm not a big fan of big down payments or early payoff of relatively low interest mortgages.  You house is an expense (unless you have a renter!), not an income producing asset.  I'd rather invest in equities (Vanguard index funds) and hold a long 30 year mortgage to full term.  I would either put in a minimal down payment (eg. FHA loan) or just the minimum to avoid PMI, although this may be pretty high.

The risk, however, is that small down payments and long mortgages tend to lead undisciplined folks to buy too much house.  I suspect it would be tough to buy a house with a monthly payment close to your current rent, but  your current rent plus hobby money may get you in the $700-900/month range.  Maybe pick up a place in a great neighborhood, but needs work.  Learn to do the work yourself and become even more of a Badass!

Oh, finally, I'd give some thought on how to find a better job, probably without a major career change.  Can you get something better locally or do you need to move to another part of the country?  Please figure this out before making a major $$ on a home purchase.

walkwalkwalk

  • Stubble
  • **
  • Posts: 170
Re: Speed me up
« Reply #17 on: January 29, 2019, 03:18:45 PM »
I have decided to quit gambling and instead semi-gamble on a site called Groundfloor. I am putting the $200 I was doing on gambling there every 1st of the month.

Anyone who knows more about Groundfloor/anything like it feel free to try to talk me out of it. However, it has a higher likelihood to be a) more financially beneficial potentially and b) I believe I can write my losses (if the loan doesn't pay off) off just like a stock sale (I'll have to look into this)

And yes, I have to do some form of "gambling" to give me the rush that driving through crazy traffic doesn't

Boofinator

  • Bristles
  • ***
  • Posts: 456
Re: Speed me up
« Reply #18 on: January 30, 2019, 07:33:45 AM »
I have decided to quit gambling and instead semi-gamble on a site called Groundfloor. I am putting the $200 I was doing on gambling there every 1st of the month.

Anyone who knows more about Groundfloor/anything like it feel free to try to talk me out of it. However, it has a higher likelihood to be a) more financially beneficial potentially and b) I believe I can write my losses (if the loan doesn't pay off) off just like a stock sale (I'll have to look into this)

And yes, I have to do some form of "gambling" to give me the rush that driving through crazy traffic doesn't

Congrats. I'm not familiar with Groundfloor, but one of the keys to FI is finding hobbies that don't cost too much. It appears you are on the right track.

bw_94

  • 5 O'Clock Shadow
  • *
  • Posts: 13
Re: Speed me up
« Reply #19 on: January 30, 2019, 08:08:42 AM »
Cut down on the gambling, cut the Red Box (you have Netflix!), and find a better paying accounting firm. That is not a fair wage for a CPA with experience. I know entry level accountants who make 50k a year without being a CPA. I think that would go a long way to speeding things up.

Good start though man, good luck!

FreeBear

  • 5 O'Clock Shadow
  • *
  • Posts: 26
Re: Speed me up
« Reply #20 on: January 30, 2019, 08:47:07 AM »
Cut down on the gambling, cut the Red Box (you have Netflix!), and find a better paying accounting firm. That is not a fair wage for a CPA with experience. I know entry level accountants who make 50k a year without being a CPA. I think that would go a long way to speeding things up.

OP, I recommend looking at baseline CPA salaries in your location as well as other locations.  Many replies suggest your are underpaid.  Are you stuck in a small, rural town?

A accounting buddy of mine made mid $60K, and just upgraded to $70K-ish with a new job closer to home.  He is studying for the CPA (not finished) and only has a year of experience, although with master's degree in accounting.  This is for a HCOL, upper midwest large city.

JZinCO

  • Pencil Stache
  • ****
  • Posts: 684
Re: Speed me up
« Reply #21 on: January 30, 2019, 08:59:08 AM »
I have decided to quit gambling and instead semi-gamble on a site called Groundfloor. I am putting the $200 I was doing on gambling there every 1st of the month.

Anyone who knows more about Groundfloor/anything like it feel free to try to talk me out of it. However, it has a higher likelihood to be a) more financially beneficial potentially and b) I believe I can write my losses (if the loan doesn't pay off) off just like a stock sale (I'll have to look into this)

And yes, I have to do some form of "gambling" to give me the rush that driving through crazy traffic doesn't

This is actually what I would have suggested! If you have to gamble, buy riskier assets. I have a little left in LendingClub (4 years and something like 4% return and wasted time). I also put money into that stupid platform where you fund small businesses by buying retail products and having the business sell them to earn a commission (I think that's how it works.. negative or flat IRR). And I have money in Fundrise (9% CAGR on closed end private REIT). They're like gambling in that I am prepared to lose it all and instead of risk because of the game rules, there is institutional risk.
edit: Yes you'll get your 1099s with reported losses that you can deduct. In my mind nothing beats hard assets like actual real estate and stocks/bonds but every now and then I get greedy and try something new.
« Last Edit: January 30, 2019, 09:02:55 AM by JZinCO »

Sweet Tart

  • 5 O'Clock Shadow
  • *
  • Posts: 12
Re: Speed me up
« Reply #22 on: February 07, 2019, 06:04:06 PM »
SIMPLE IRA (old): $21,555.99 (at Edward Jones in the process of rolling over to Pioneer soon, yes I know both of them have bad fees but I could only roll it over to another SIMPLE IRA so I am stuck with it for now)

Vanguard offers SIMPLE IRA's.  You do not have to roll over to your new employer's plan.
How exactly would I start a SIMPLE IRA at Vanguard without an active business that makes money? Sorry that doesn't make sense. Unless you meant I should convince my employer to switch to them?

I am suggesting you do a rollover from your old employer to Vanguard, rather than rolling it into your new employer's high-fee custodian.  You can't contribute more to it (without your own company) but it would otherwise work just like a 401k rollover to an IRA.  Just call them or search for the form on their website.
I wasn't in my SIMPLE for 3 years(this is the required minimum time to roll over to an non SINPLE IRA) -long story. But thanks for the thought.

FYI-Vanguard has a SIMPLE IRA option that is "locked" and can only be used to transfer other SIMPLE IRA money into. I just set one up because my employer has a SIMPLE IRA with American Funds and I just jumped through all the hoops to set up a monthly transfer to my new Vanguard SIMPLE IRA.

Chrissy

  • Pencil Stache
  • ****
  • Posts: 798
  • Age: 41
  • Location: Chicago
Re: Speed me up
« Reply #23 on: February 08, 2019, 03:18:53 PM »
Speed you up?  Okay, don't do a 30% down payment.  Do 20%, and put the rest in the market where it will do better, long-term, than paying down the mortgage.

Also, once you own a place, rent out the other bedrooms, basement, garage... etc.

As others have said, start job shopping in July, once you have a full year there.  Then, once you get an offer, negotiate.

walkwalkwalk

  • Stubble
  • **
  • Posts: 170
Re: Speed me up
« Reply #24 on: February 08, 2019, 07:21:22 PM »
SIMPLE IRA (old): $21,555.99 (at Edward Jones in the process of rolling over to Pioneer soon, yes I know both of them have bad fees but I could only roll it over to another SIMPLE IRA so I am stuck with it for now)

Vanguard offers SIMPLE IRA's.  You do not have to roll over to your new employer's plan.
How exactly would I start a SIMPLE IRA at Vanguard without an active business that makes money? Sorry that doesn't make sense. Unless you meant I should convince my employer to switch to them?

I am suggesting you do a rollover from your old employer to Vanguard, rather than rolling it into your new employer's high-fee custodian.  You can't contribute more to it (without your own company) but it would otherwise work just like a 401k rollover to an IRA.  Just call them or search for the form on their website.
I wasn't in my SIMPLE for 3 years(this is the required minimum time to roll over to an non SINPLE IRA) -long story. But thanks for the thought.

FYI-Vanguard has a SIMPLE IRA option that is "locked" and can only be used to transfer other SIMPLE IRA money into. I just set one up because my employer has a SIMPLE IRA with American Funds and I just jumped through all the hoops to set up a monthly transfer to my new Vanguard SIMPLE IRA.
I wish I could do that, however my VERY small employer is very inconsistent about the contributions he is not timely making to my Amundi pioneer SIMPLE IRA. Thank you, but it wouldn't work in my case.

However, I did just lower my contributions so less will have the high fees there and I will have more take home to invest in Vanguard through my taxable account, this time going all in VTSAX.