Author Topic: Want to FI (NOT RE) in 10 years  (Read 2897 times)

gpyros85

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Want to FI (NOT RE) in 10 years
« on: April 30, 2018, 07:39:33 PM »
Hello all! 32 year old father of 3 boys, I want to FI in 10 years or less.

Income

$98,000 W2 Wage Earner (Engineer, no significant income growth in future)

Current assets

401K                 $53,300
Roth IRA            $22570
Taxable              $11,000
Cash                  $1700

Total Assets        $88,570


Total Liabilities     $0 (excluding mortgage) (~$128,000 owed on mortgage on 160k-170k home)


Monthly savings allotment

$1,970 to 401K (19% + 4.5% match)
$1,430 distributed to Roth IRA then to Taxable after max
$3,400 total month total MINIMUM savings, could be $100-$300+ plus ~$2400 tax return on average

$40,800 minimum/yearly savings


Cash Flow

$5412/month take home after 401k & taxes
$1450/month bills, utility, mortgage, car insurance (660 mortgage & 360 taxes & home insurance)
$850/month food
$300/month wife allowance
$150/month gas

$800/month free cash (This is where I take the cuts, this is allotted for spending time with the kids, kids camp, restaurant whatever quality time with the kids, around $200/week which I usually take 50-75/week to savings)

$432/month remaining misc, this is also where I take the cuts if needed, it is a buffer.


All in all, I feel my monthly recurring expenses are keep fairly low but where I can afford to do more with less is the $800 & $432. However, even if I spend 100% of that amount still coming out with a healthy $40,800/year or 41.6% of income.



Opinions?
« Last Edit: April 30, 2018, 08:23:16 PM by gpyros85 »

Freedomin5

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Re: Want to FI (NOT RE) in 10 years
« Reply #1 on: April 30, 2018, 08:43:12 PM »
If you want to FI in 10 years, the calculation is quite simple.

You're currently spending $3982 per month, or $47784 per year (including your $800 and $432 per month in miscellaneous things). If you want to be FI with that level of spending, just multiply by 25 (assuming 4% withdrawal rate on your stash). That means you need $1,194,600. If you can get your investments to $1,194,600 in 10 years, then you are FI.

However, if you project that you will be saving $40,800 per year for the next 10 years, then that will only get you to $496,570, not including compound interest. If we assume interest is compounded annually at 7%, then you should be at $777,401. That's supposed to be quite generous for the next 10 years -- there are rumbles we are heading into a recession, but who knows??

Basically, no, you won't have enough to retire in 10 years at the rate you're going now.

Now, if you were to put ALL of your free cash each month into savings, that would give you $55,584 per year in savings, which after 10 years compounded at 7% would get you to $995,962. Still not enough to retire at your current expense level. However, throwing your extra cash into investments means you've lowered your expenses to just the basics (not including the $800 and $432), then your monthly expenses will be $2750, and your annual expenses will be $33,000. That means you only need a stash of $825,000. So then yes, you will be FI.

You could also consider talking to your wife about having her earn her wife allowance through side hustles. $300 per month is not a lot of money and can easily be earned by babysitting others' kids, or teaching English online, etc. I'm not trying to be sexist -- I am the wife, and my DH and I both earn our own allowance through side hustles. We both earn about $200 per week in side hustles which we then spend on whatever we like.

gpyros85

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Re: Want to FI (NOT RE) in 10 years
« Reply #2 on: April 30, 2018, 09:00:24 PM »
Thanks for the reply,

I am considering FI on the $777,401 mentioned because I will consider my BASE expenses which is

$1450/month bills, utility, mortgage, car insurance (660 mortgage & 360 taxes & home insurance)
$850/month food

$27,600/year X 25 = $690,000

This is being FI isn't it? I can provide roof over family head and food, life won't be luxurious (we don't like luxury) but rather no fun experiences. I could get ANY job I wanted to provide for any "extras" I wanted in life.


Yes, there might be some opportunity with the $300 wife budget but with an infant it is very difficult, maybe a 5 year plan. However, it might not be necessary. Also, she pays for her own cell phone bill out of that budget and whatever misc the kids need for school and food.


Is this not a good way to think about it?

Freedomin5

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Re: Want to FI (NOT RE) in 10 years
« Reply #3 on: April 30, 2018, 11:10:46 PM »
Yes, some in these forums call it "barebones FI" or "lean FI". That's how I think about FI. Again, that's assuming that you get a 7% ROI per year over the next 10 years, and that your budget is accurate (i.e., no hidden expenses or expenses that are unaccounted, such as a new roof, or replacing a new vehicle, etc.).

But...if you don't like luxury, how is it that you currently spend $800 on eating out at restaurants, taking the kids out for entertainment, etc.? That sounds pretty luxurious to me...unless I'm missing something or misread something?

If you aren't already doing so, consider tracking your expenses via YNAB or some other app/software, to get a good handle on your actual spending. I'm not sure if you've included life insurance or health insurance in your $1450 monthly bills number. If you have three kids, one of which is a baby and your wife is a SAHP, you may want to consider purchasing term life insurance in the event that something happens to you, the primary breadwinner.

MrsWolfeRN

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Re: Want to FI (NOT RE) in 10 years
« Reply #4 on: May 01, 2018, 05:13:40 AM »
Your budget looks idealistic, you might be forgetting some things . Don't forget medical premiums and copays if you are in the US.
$850/ month for food is high, you could probably get this down to $600 or so without too much effort, especially if other categories are going towards food as well. Again it might help to know which country you are in.
$300 + 800 + 432  Can you break this out into actual spending categories? I know this will take some work.

Also, please don't call it an "allowance ".

Can you track your family's actual spending for three months or so and then do a full case study?

ysette9

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Re: Want to FI (NOT RE) in 10 years
« Reply #5 on: May 01, 2018, 08:24:49 AM »
As others have said, more details are needed. I’m presuming your $800 bucket includes things like cell phone, clothes, shoes, health insurance premiums and related expenses, house maintenance and improvement, insurance, vacation, college savings, so on and so forth. There is a lot missing.

Personally I like using cFIREsim to model my situation in detail instead of just using the 25x guideline. That factors in things like a small SS stream late in life and paying off the mortgage. Details like that make a big difference. 25x is a great initial cut to target but as you get closer or want more motivation, I like the detailed modeling.

partgypsy

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Re: Want to FI (NOT RE) in 10 years
« Reply #6 on: May 01, 2018, 08:31:07 AM »
You are close. If you have your basics (including gas and wife allowance) and add another 500 you will have a budget of 3250 a month. Do you feel that 500/month is roomy enough for restaurants, kids activities, and I assume everything else including house repairs, new shoes/coats/underwear, yard work, replacing items in the house? Or does house stuff like door mats and replacing the vacuumn cleaner and kid's clothes come out of the wife allowance?

That means your goal is 975K invested. If you take the remaining amount and throw that into savings(800+432=500=732), you will have a savings of 49584 a year. Start with your 88K dollars and invest monthly. By year 11 you will reach 993K, tax deferred. So if you are willing to do it in 11 years, staying with this pace it is achievable. I think you also need to see, whether rest of family is on board with this level of frugality. If it's working for you all, that's great.

gpyros85

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Re: Want to FI (NOT RE) in 10 years
« Reply #7 on: May 01, 2018, 10:14:18 AM »
Yes, some in these forums call it "barebones FI" or "lean FI". That's how I think about FI. Again, that's assuming that you get a 7% ROI per year over the next 10 years, and that your budget is accurate (i.e., no hidden expenses or expenses that are unaccounted, such as a new roof, or replacing a new vehicle, etc.).

But...if you don't like luxury, how is it that you currently spend $800 on eating out at restaurants, taking the kids out for entertainment, etc.? That sounds pretty luxurious to me...unless I'm missing something or misread something?

If you aren't already doing so, consider tracking your expenses via YNAB or some other app/software, to get a good handle on your actual spending. I'm not sure if you've included life insurance or health insurance in your $1450 monthly bills number. If you have three kids, one of which is a baby and your wife is a SAHP, you may want to consider purchasing term life insurance in the event that something happens to you, the primary breadwinner.



Yes, this is true, I am lean on the recurring budget (My opinion), however it is the $800 a month I can improve. I automatically bring this $800 to a separate bank account and have been in the past spending this money freely. I have came a long way, only started this FI journey in January with true direction. I have always been what I thought was "frugal" no debt, low recurring bills.

As far as cars that are paid off and don't see replacement in the future

2016 & 2010 vehicles also house is 3 years old bought brand new so don't predict much in the way of large capital expenses.

Also, we leave in the United States very low cost of living, just was announced as one of the best places to live under 60k. However, jobs change and who knows what the future predicts.

gpyros85

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Re: Want to FI (NOT RE) in 10 years
« Reply #8 on: May 01, 2018, 10:22:13 AM »
As others have said, more details are needed. Iím presuming your $800 bucket includes things like cell phone, clothes, shoes, health insurance premiums and related expenses, house maintenance and improvement, insurance, vacation, college savings, so on and so forth. There is a lot missing.

Personally I like using cFIREsim to model my situation in detail instead of just using the 25x guideline. That factors in things like a small SS stream late in life and paying off the mortgage. Details like that make a big difference. 25x is a great initial cut to target but as you get closer or want more motivation, I like the detailed modeling.


Wife cell phone is included in $300 which is $40/month. I have work covered cell phone.

Yes, the $800 included clothing, restaurants & activities with the children on the weekend. I keep a hard ceiling on the $800 and sometimes go under so savings can come from there.

Health Insurance is included in work for $200/month for family

House Maintenance would come from the $432/month if needed otherwise it is saved/invested.

No college savings as I graduated college with no helping hand, I don't believe in this area of savings. I went to high school sponsored trade school followed by Pell Grant sponsored College. I will not support a 20k+/year college tuition with room & board. My college cost 6k/year and this can EASILY be paid with a part time job living at home.

Vacation comes from the 432/month but I get nearly free vacation since I do international travel so airplane miles and hotels points make it almost free. I substitute food budget from grocery to eating out so it is around net 0 (usually a little more but negligible)

gpyros85

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Re: Want to FI (NOT RE) in 10 years
« Reply #9 on: May 01, 2018, 10:33:25 AM »
FYI, I didn't want to complicate the calculation but there will be a 200k bonus coming in the next year which will be paid out. This is a specific project bonus.

From what I gather with my current budget, I am FI in 11 years give or take? So the 200k bonus will only reduce that timeline.

gpyros85

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Re: Want to FI (NOT RE) in 10 years
« Reply #10 on: May 01, 2018, 10:40:41 AM »
Before January 2018, I had savings goals but NO direction.

Finding Money Mustache in January 2018 I dove into every article from blog #1.

I discussed with my wife this, shown the concepts, she understands thinks MMM is very aggressive but has direction which I lacked.

Before January 2018, I never went into debt, always took advantage of credit cards (Rewards) so I have I guess a good foundation but no direction. I was saving around 12%+ I purchased cars cash and ATV cash.

Now, moving forward, I realized the trading time for dollars. I still enjoy to work and don't plan on full out "retire" but I really like the Jim Collins FU money concept where to me, I only work on projects that excite me and do NOTHING I don't want to do, this is VERY powerful to me. My goal is to lean FI around 40 and transition into a more flexible career instead of the 8-5pm.

partgypsy

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Re: Want to FI (NOT RE) in 10 years
« Reply #11 on: May 01, 2018, 11:06:22 AM »
Big picture things, with bonus, I would set aside an emergency fund (cd/money market). You are sole breadwinner with a wife, 3 kids and a house. Most people suggest 3-6 months expenses is in the 10-20K range for you. Also if you do not yet have a will, you and your wife should make wills. consider whether it is worth getting life insurance for the next 10 years until you are financially independent, unless you feel your wife can easily return to work if something should happen to you. In turn if she passes you would need to hire someone to care for kids so you could continue working.  Hopefully you will never need to use the efund or insurance, but it's good sense not to cut things too close.

ysette9

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Re: Want to FI (NOT RE) in 10 years
« Reply #12 on: May 01, 2018, 11:11:11 AM »
As others have said, more details are needed. I’m presuming your $800 bucket includes things like cell phone, clothes, shoes, health insurance premiums and related expenses, house maintenance and improvement, insurance, vacation, college savings, so on and so forth. There is a lot missing.

Personally I like using cFIREsim to model my situation in detail instead of just using the 25x guideline. That factors in things like a small SS stream late in life and paying off the mortgage. Details like that make a big difference. 25x is a great initial cut to target but as you get closer or want more motivation, I like the detailed modeling.

No college savings as I graduated college with no helping hand, I don't believe in this area of savings. I went to high school sponsored trade school followed by Pell Grant sponsored College. I will not support a 20k+/year college tuition with room & board. My college cost 6k/year and this can EASILY be paid with a part time job living at home.


May the odds ever be in your favor.

My public university tuition and fees doubled in the 2.5 years I was there. This was 15 years ago and the costs since then have doubled again and then some.

gpyros85

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Re: Want to FI (NOT RE) in 10 years
« Reply #13 on: May 01, 2018, 12:01:24 PM »
Big picture things, with bonus, I would set aside an emergency fund (cd/money market). You are sole breadwinner with a wife, 3 kids and a house. Most people suggest 3-6 months expenses is in the 10-20K range for you. Also if you do not yet have a will, you and your wife should make wills. consider whether it is worth getting life insurance for the next 10 years until you are financially independent, unless you feel your wife can easily return to work if something should happen to you. In turn if she passes you would need to hire someone to care for kids so you could continue working.  Hopefully you will never need to use the efund or insurance, but it's good sense not to cut things too close.

If I pass away, she will be more than set up. I have life insurance through the company at 2x my salary. Also, from what I researched there will be around $1,800/month in social security in case of my death..


ysette9

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Re: Want to FI (NOT RE) in 10 years
« Reply #14 on: May 01, 2018, 12:22:43 PM »
My company just changed their benefits at the beginning of the year and made most things less generous, including reducing covered life insurance to 1x. We got separate life insurance policies outside of our work places to make sure that we had some minimal level of coverage independent of job changes, employed whims, etc. That may be worth considering.

gpyros85

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Re: Want to FI (NOT RE) in 10 years
« Reply #15 on: May 01, 2018, 01:12:24 PM »
My company just changed their benefits at the beginning of the year and made most things less generous, including reducing covered life insurance to 1x. We got separate life insurance policies outside of our work places to make sure that we had some minimal level of coverage independent of job changes, employed whims, etc. That may be worth considering.

Worth considering it is a sensitive subject since nobody wants to talk death especially at such a young age.

ysette9

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Re: Want to FI (NOT RE) in 10 years
« Reply #16 on: May 01, 2018, 01:42:54 PM »
It is a tough conversation but one worth having. It is scary how many young people I have seen die unexpectedly in the past few years, two young men of rare brain cancer. You absolutely don’t see this stuff coming and you don’t want the well-being is your family to hinge on you being able to stay an employee somewhere while going through the dying process.

shelbyautumn

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Re: Want to FI (NOT RE) in 10 years
« Reply #17 on: May 01, 2018, 02:12:48 PM »
Big picture things, with bonus, I would set aside an emergency fund (cd/money market). You are sole breadwinner with a wife, 3 kids and a house. Most people suggest 3-6 months expenses is in the 10-20K range for you. Also if you do not yet have a will, you and your wife should make wills. consider whether it is worth getting life insurance for the next 10 years until you are financially independent, unless you feel your wife can easily return to work if something should happen to you. In turn if she passes you would need to hire someone to care for kids so you could continue working.  Hopefully you will never need to use the efund or insurance, but it's good sense not to cut things too close.

If I pass away, she will be more than set up. I have life insurance through the company at 2x my salary. Also, from what I researched there will be around $1,800/month in social security in case of my death..

I make $45,000 a year, with a part-time working spouse (he's in nursing school) and no children, and I have double the life insurance you do. My life insurance costs me less than $10 a month and is 100% worth it. 2x your salary is $196k...that's not a lot of money and it isn't going to go very far for very long supporting 4 people and a funeral. You need to think long term, not just a few years. SAHMs have a hard time re-entering the workforce and if something happens to you, your wife will need to go back to work. My college educated mom can't find a minimum wage job right now because she has been home for 18 years. Old Navy won't even call her back. That money will last maybe four years and that's if your wife gets more frugal than she is now. I'd try to up that amount to give your family a little more security.

gpyros85

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Re: Want to FI (NOT RE) in 10 years
« Reply #18 on: May 01, 2018, 03:07:39 PM »
Are we considering the Social Security Administration benefits? It is 75% of the SSA payout.

It is a family maximum of $4362.40 with the breakdown of

$1869.00 for Child
$1869.00 for Spouse caring for child

Couple this will 2x salary and the money currently saved (and growing) how is this not enough?

shelbyautumn

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Re: Want to FI (NOT RE) in 10 years
« Reply #19 on: May 01, 2018, 03:22:00 PM »
Are we considering the Social Security Administration benefits? It is 75% of the SSA payout.

It is a family maximum of $4362.40 with the breakdown of

$1869.00 for Child
$1869.00 for Spouse caring for child

Couple this will 2x salary and the money currently saved (and growing) how is this not enough?

I don't ever count Social Security. I'm a millennial - I don't trust it's going to be around. It's too big of a gamble for me to count on it.
« Last Edit: May 01, 2018, 03:23:40 PM by shelbyautumn »

gpyros85

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Re: Want to FI (NOT RE) in 10 years
« Reply #20 on: May 01, 2018, 03:29:28 PM »
Are we considering the Social Security Administration benefits? It is 75% of the SSA payout.

It is a family maximum of $4362.40 with the breakdown of

$1869.00 for Child
$1869.00 for Spouse caring for child

Couple this will 2x salary and the money currently saved (and growing) how is this not enough?

I don't ever count Social Security. I'm a millennial - I don't trust it's going to be around. It's too big of a gamble for me to count on it.


Ehh it will always be around, govt will just print money so the money will be worth less, not worthless.

Laura33

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Re: Want to FI (NOT RE) in 10 years
« Reply #21 on: May 03, 2018, 11:15:53 AM »
No college savings as I graduated college with no helping hand, I don't believe in this area of savings. I went to high school sponsored trade school followed by Pell Grant sponsored College. I will not support a 20k+/year college tuition with room & board. My college cost 6k/year and this can EASILY be paid with a part time job living at home.

For your kids' sake, please do a little research on what college costs nowadays, instead of refusing on matter of principle.  First, Pell Grants ARE a helping hand -- it's just provided by Uncle Sam instead of your parents.  Pell Grants are given by the government to kids from poor families who otherwise wouldn't be able to pay for college.  You, OTOH, will have close to a million bucks put away, so I'd be very surprised if your kids qualified.

Second, most schools cost a lot more than $6K nowdays -- and every single one is going to assume that you will pay a certain percentage of your million bucks towards that cost.*  Basically, most colleges will offer financial aid based on your family's demonstrated financial need: they will assume that you as the parent will contribute a certain amount as the "Expected Family Contribution," and they will offer grants, loans, and work study to cover the rest (if you're lucky).  You can choose not to pay the EFC, of course; that's your prerogative.  But that means your kids will have to work and/or find someone who will lend them the money -- without you as a cosigner -- to cover the difference.

Finally, your kids' aid package is probably already going to assume that they are working @10-15 hrs/week on work study.  If they also need to cover the EFC that you are not paying, that is a lot more hours.  And FWIW, there is some research that indicates that kids who work more than about 20 hrs/week don't do as well in their classes as kids who keep it to part-time. 

Obviously, they are your kids, and it is your prerogative to do whatever you want.  Please just make an informed decision, so you and your kids know exactly what they will need to do to get a degree.  There are ways to do it even today -- part-time jobs starting in HS, community college for 2-3 years to get the prerequisites out of the way, then finishing off full-time at the local university in another 2-4 years depending on the required balance of paid work vs. courseload.  But all of this is made easier when the kids know what to plan for by about 9th grade.

*How they calculate this depends on the school and on the type of account, e.g., retirement counts may be treated differently than regular investment accounts.  Knowing the rules now can help you structure your savings in a way that will maximize your kids' eligibility for financial aid.

gpyros85

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Re: Want to FI (NOT RE) in 10 years
« Reply #22 on: May 03, 2018, 12:37:24 PM »
No college savings as I graduated college with no helping hand, I don't believe in this area of savings. I went to high school sponsored trade school followed by Pell Grant sponsored College. I will not support a 20k+/year college tuition with room & board. My college cost 6k/year and this can EASILY be paid with a part time job living at home.

For your kids' sake, please do a little research on what college costs nowadays, instead of refusing on matter of principle.  First, Pell Grants ARE a helping hand -- it's just provided by Uncle Sam instead of your parents.  Pell Grants are given by the government to kids from poor families who otherwise wouldn't be able to pay for college.  You, OTOH, will have close to a million bucks put away, so I'd be very surprised if your kids qualified.

Second, most schools cost a lot more than $6K nowdays -- and every single one is going to assume that you will pay a certain percentage of your million bucks towards that cost.*  Basically, most colleges will offer financial aid based on your family's demonstrated financial need: they will assume that you as the parent will contribute a certain amount as the "Expected Family Contribution," and they will offer grants, loans, and work study to cover the rest (if you're lucky).  You can choose not to pay the EFC, of course; that's your prerogative.  But that means your kids will have to work and/or find someone who will lend them the money -- without you as a cosigner -- to cover the difference.

Finally, your kids' aid package is probably already going to assume that they are working @10-15 hrs/week on work study.  If they also need to cover the EFC that you are not paying, that is a lot more hours.  And FWIW, there is some research that indicates that kids who work more than about 20 hrs/week don't do as well in their classes as kids who keep it to part-time. 

Obviously, they are your kids, and it is your prerogative to do whatever you want.  Please just make an informed decision, so you and your kids know exactly what they will need to do to get a degree.  There are ways to do it even today -- part-time jobs starting in HS, community college for 2-3 years to get the prerequisites out of the way, then finishing off full-time at the local university in another 2-4 years depending on the required balance of paid work vs. courseload.  But all of this is made easier when the kids know what to plan for by about 9th grade.

*How they calculate this depends on the school and on the type of account, e.g., retirement counts may be treated differently than regular investment accounts.  Knowing the rules now can help you structure your savings in a way that will maximize your kids' eligibility for financial aid.


After 23 years old it looks at the studentís income not the parents. I know many children I went to school with on free rides from parents and they pissed; poor grades and party. I worked 45 hours/week while attending 9 credit hours of school for 5 years and I had a job faster and better paying than the kids that only went to school. Granted, my trade school certification and working career tied into the college degree.

My kids will know there is not a pot of gold at the end of the day, also, will go the community college or trade school route. Also, I will advocate them to take college credit in high school.

They will be successful.

gpyros85

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Re: Want to FI (NOT RE) in 10 years
« Reply #23 on: May 03, 2018, 12:58:51 PM »
I worked in the trades and started around 27k/year and made it up to around 40k/year while in college. I lived at home for the first few years of being in the trades, nobody was kicking me out, I myself will NOT kick my kids out.

Even if they work 20 hours a week @ $6/week and maybe more in the summer this is plenty enough to be able to pay for college, if I had to pay for a class here and there I would support.

I don't understand the push to have a large fund to send the kids off to college, there are plenty of other ways to reach the same goal. I see some parents of students pay 20k+ for full room and board and the kids don't work. The college student life is less demanding than high school, I did engineering, 3 classes (9 credit hours) could be packed into 2 days a week for total of 12 hours/week and they usually start middle January and end late April/early May. This leaves plenty of hours to work/study.

ysette9

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Re: Want to FI (NOT RE) in 10 years
« Reply #24 on: May 03, 2018, 03:10:00 PM »
My first year at junior college I worked three days a week and went to school the other four days a week. That meant that seven days a week I was either working a full day or doing a full day of school. I was able to do that for the first year. Halfway through the second year as my hard science and math classes ramped up I wasn’t able to keep up the balance. Once I transferred to my university for my undergrad in engineering, not only could I not fit in any work, but I had zero social life (unless you count study groups), and I was having health problems due to the stress of keeping up.

I was able to do two summer internships and put that money towards tuition and books, but it was nowhere near enough to cover my 2.5 years at my public university.

I am not necessarily advocating paying in full four four years away from home at a party school, but I am immensely grateful to my parents that I was able to go to a good school, major in a lucrative field, and keep focus to get good grades without worrying about how to stay fed and not go homeless. Some of my classmates did have to worry about things like being homeless and unsurprisingly, it impacts your ability to focus on school.

gpyros85

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Re: Want to FI (NOT RE) in 10 years
« Reply #25 on: July 07, 2018, 05:15:12 PM »
Hello all! 32 year old father of 3 boys, I want to FI in 10 years or less.

Income

$98,000 W2 Wage Earner (Engineer, no significant income growth in future)  This might be a lie, I was given an expat position for 2 years @ 170k/year

Current assets

401K                 $53,300         $57,478
Roth IRA            $22570          $22,580
Taxable              $11,000         $29,359    This grew A LOT with the savings rate and a few bonuses
Cash                  $1700            $0             Need to grow this back up, next month will replenish

Total Assets        $88,570          $109,417


Total Liabilities     $0 (excluding mortgage) (~$128,000 owed on mortgage on 160k-170k home)  Nothing changed now owe $127,300 on house.


Monthly savings allotment

$1,970 to 401K (19% + 4.5% match)        No Change
$1,430 distributed to Roth IRA then to Taxable after max       (Now $1,630)
$3,400 total month total MINIMUM savings, could be $100-$300+ plus ~$2400 tax return on average

$40,800 minimum/yearly savings

Bonus of $4,000/month for expat position for next 16 months

Cash Flow

$5412/month take home after 401k & taxes
$1450/month bills, utility, mortgage, car insurance (660 mortgage & 360 taxes & home insurance)
$850/month food          (Have reduced to $700/month)
$300/month wife allowance
$150/month gas

$800/month free cash (This is where I take the cuts, this is allotted for spending time with the kids, kids camp, restaurant whatever quality time with the kids, around $200/week which I usually take 50-75/week to savings)     

Now it is 600/month, cut back on the quick bites to eat in fast food and now have been focusing on pre-planned meals before heading out for the day with the family, before we would leave 10am no lunch and 3 kids would be hungry, then go to fast food for a quick $30. This has significantly been reduced and now the restaurant spending is spent more thoughtfully. Before was mindless spending.

$432/month remaining misc, this is also where I take the cuts if needed, it is a buffer.


All in all, I feel my monthly recurring expenses are keep fairly low but where I can afford to do more with less is the $800 & $432. However, even if I spend 100% of that amount still coming out with a healthy $40,800/year or 41.6% of income.

Opinions?


So as I mentioned in the last sentence the $800 has been reduced, feel I can reduce more without noticing a change.


However, now that we are relocated there will be a "temporary" budget. Nevertheless, for the past 2 months, MMM principles have worked! I also started a blog

Also, I came to the conclusion that I am passionate about my job and if I keep at this rate will want to work past 40. However, all the calculations I show don't work until past 40. I would need $960k to keep my current lifestyle..... I just don't see anything happening before the kids are grown which puts me at 50, with about $2.1M. Also, in my head don't feel this will be enough at 50 which is 18 years from now...


Any opinions?

gpyros85

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Re: Want to FI (NOT RE) in 10 years
« Reply #26 on: July 07, 2018, 05:36:36 PM »
Hello all! 32 year old father of 3 boys, I want to FI in 10 years or less.

Income

$98,000 W2 Wage Earner (Engineer, no significant income growth in future)  This might be a lie, I was given an expat position for 2 years @ 170k/year

Current assets

401K                 $53,300         $57,478
Roth IRA            $22570          $22,580
Taxable              $11,000         $29,359    This grew A LOT with the savings rate and a few bonuses
Cash                  $1700            $0             Need to grow this back up, next month will replenish

Total Assets        $88,570          $109,417


Total Liabilities     $0 (excluding mortgage) (~$128,000 owed on mortgage on 160k-170k home)  Nothing changed now owe $127,300 on house.


Monthly savings allotment

$1,970 to 401K (19% + 4.5% match)        No Change
$1,430 distributed to Roth IRA then to Taxable after max       (Now $1,630)
$3,400 total month total MINIMUM savings, could be $100-$300+ plus ~$2400 tax return on average

$40,800 minimum/yearly savings

Bonus of $4,000/month for expat position for next 16 months

Cash Flow

$5412/month take home after 401k & taxes
$1450/month bills, utility, mortgage, car insurance (660 mortgage & 360 taxes & home insurance)
$850/month food          (Have reduced to $700/month)
$300/month wife allowance
$150/month gas

$800/month free cash (This is where I take the cuts, this is allotted for spending time with the kids, kids camp, restaurant whatever quality time with the kids, around $200/week which I usually take 50-75/week to savings)     

Now it is 600/month, cut back on the quick bites to eat in fast food and now have been focusing on pre-planned meals before heading out for the day with the family, before we would leave 10am no lunch and 3 kids would be hungry, then go to fast food for a quick $30. This has significantly been reduced and now the restaurant spending is spent more thoughtfully. Before was mindless spending.

$432/month remaining misc, this is also where I take the cuts if needed, it is a buffer.


All in all, I feel my monthly recurring expenses are keep fairly low but where I can afford to do more with less is the $800 & $432. However, even if I spend 100% of that amount still coming out with a healthy $40,800/year or 41.6% of income.

Opinions?


So as I mentioned in the last sentence the $800 has been reduced, feel I can reduce more without noticing a change.


However, now that we are relocated there will be a "temporary" budget. Nevertheless, for the past 2 months, MMM principles have worked! I also started a blog

Also, I came to the conclusion that I am passionate about my job and if I keep at this rate will want to work past 40. However, all the calculations I show don't work until past 40. I would need $960k to keep my current lifestyle..... I just don't see anything happening before the kids are grown which puts me at 50, with about $2.1M. Also, in my head don't feel this will be enough at 50 which is 18 years from now...

Also, seems like if I retire at the low end of the standard retirement age (62), I would have something like $6M+ dollars, crazy amount, funny how MMM has changed this.


Any opinions?

deborah

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Re: Want to FI (NOT RE) in 10 years
« Reply #27 on: July 07, 2018, 06:22:13 PM »
I think you arenít tracking everything. How come your wife contributes, yet her own earnings and spending is not included? Total yearly expenses are needed for you to calculate the amount you actually need to save. Admittedly, this may now be an intellectual exercise, as you are not interested in retirement, and may change your income dramatically in the future, as you just have!

Congratulations on the relocation.

gpyros85

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Re: Want to FI (NOT RE) in 10 years
« Reply #28 on: July 07, 2018, 07:08:59 PM »
I think you arenít tracking everything. How come your wife contributes, yet her own earnings and spending is not included? Total yearly expenses are needed for you to calculate the amount you actually need to save. Admittedly, this may now be an intellectual exercise, as you are not interested in retirement, and may change your income dramatically in the future, as you just have!

Congratulations on the relocation.

Wife is stay at home mom and her spending is in the $300 this is strictly hers for whatever she wants. Also, she controls the grocery spending.

gpyros85

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Re: Want to FI (NOT RE) in 10 years
« Reply #29 on: July 07, 2018, 07:52:29 PM »
Admittedly, this may now be an intellectual exercise, as you are not interested in retirement, and may change your income dramatically in the future, as you just have!

This could change, I think this is why we all save for FI....

It is a catch 22, I love my job, however I want more time with my family... I is near impossible to have both..

I justify this as even if I was FI, during school hours, I wouldn't be with my kids anyway so why not go to work??