The Money Mustache Community
General Discussion => Share Your Badassity => Topic started by: Cottonswab on February 15, 2014, 09:47:21 PM
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I recently achieved a net worth equal to 25x annual expenses (4% withdrawl rate) at Age 27! I translate this to mean that I will need to continue working for money in some form or fashion, but with the freedom to leave my current employer at any time and remain unemployed for a few years (i.e., FU Money).
I still have a ways to go, before reaching my FIRE Money Milestone, which I consider to be roughly 38x annual expenses (2.6% withdrawl rate).
With the notable exceptions of having been born to intelligent and industrious middle-class parents that paid my way through school, I have not enjoyed any significant windfalls or other unusual benefits that are not available to most other US citizens that attend state universities. I have achieved this milestone primarily by working hard to obtain employment in a well-paid field, in a well-paid industry, with a subjective merit-based compensation system. I have continued to work hard, to be rewarded by my employer's (S&P 500 Company) merit-based compensation system and obtain overseas assignments that offer expatriate premiums. I have not received stock options, bonuses, or anything other than an annual salary that changes year-to-year based on performance, experience, and US labor market conditions.
Frugality has also played a part in this financial success. I would not be considered exceptionally frugal by MMM standards. However, my average annual expenses are significantly lower than those of my peers and co-workers.
Ultimately, my approach to personal finance has been similiar to MMM's, and can be summarized as:
- Make financial independence a high priority (Make as much money as you can, as early as you can!)
- Enjoy hobbies and interests that are relatively cheap
- Base purchasing decisions primarily on relative "return on investment" (happiness/cost)
- Occasionally review and optimize costs, when it is worth the time and effort to do so
- Do NOT strictly budget expenses or savings (which could limit ability to take advangate of unforseen opportunities and/or cause unnecessary stress)
- Invest savings with the intention of maximizing long-term risk-adjusted total return, as appropriate for the market conditions (flexible asset allocation) and diversify these investments into businesses (stocks & bonds) or derivatives (ETFs, mutual funds) with transparent risks that I understand.
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Kids in the future? If so, I wouldn't consider yourself FI until you have those costs covered, but congrats for the savings.
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Congratulations on your success!
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Net worth is 25x expenses, or value of income-producing investments is 25x expenses?
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RE: Baron 235
I am currently single, with no children. Kids would definitely be a significant unplanned (but hopefully managable) expense. I cannot see myself having more than 3 kids. And if I do have kids, I will force them to be financially independent of their father, sooner than later ;P
RE: Sword Guy
In this case, Net Worth = Income-Producing Investments.
Depreciating assets (iPhone, iPad, clothing, sports gear, etc.) not included in net worth. I do not own real-estate or cars. Neither do I have any debt.
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Well done, may you not need to use the FU money!
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Congratulations!* If I may ask, are you planning on changing your lifestyle now that you have reached this mileston?
Like working a bit less or only taking up the assignments of your choice, reading more, learning certain skills or whatever your dreams are?
* I also almost reached my goal of FU money, which is nowhere near your definition, just a mere 5 x annual expenses + emergency fund.
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Welcome and congrats on your success!
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RE:train_writer
Yes. I am planning to change my lifestyle. However, not suddenly or dramatically. Over the next few years, I plan to gradually make the following changes:
1. Move to a more desirable work & living location
2. Reduce the amount of time spent working from 55-80 hrs/week (current) to 20-40 hrs/week or switch to rotational work.
3. Spend more time focusing on ticking line items off my bucket list :)
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Kinda feel like you blew off the kids advice. I've got a toddler and besides daycare he isn't very expensive. But he will likely be a teenager that eats more than I do, And maybe wants to play hockey or go to Space camp. Who would want to deny their kid these things?
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Congrats! Always invigorating to see someone hit their goals.
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Congratulations!
What region of the country is your "more desirable work and living location" if you don't mind me asking?
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Kinda feel like you blew off the kids advice. I've got a toddler and besides daycare he isn't very expensive. But he will likely be a teenager that eats more than I do, And maybe wants to play hockey or go to Space camp. Who would want to deny their kid these things?
He's 27, with a decent stache and desires to still work, but on his own terms.
I think he'll be fine, should he choose to have kids.
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Impressive! Tell us more details...
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1. Move to a more desirable work & living location
2. Reduce the amount of time spent working from 55-80 hrs/week (current) to 20-40 hrs/week or switch to rotational work.
3. Spend more time focusing on ticking line items off my bucket list :)
That sounds like a great and thoughtful plan! Remember, for every item you tick off your bucket list, you probably invent 2 more (or so it works for me). Enjoy!
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Congrats! That's amazing!
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Congrats! Living oversees has been a big benefit, no doubt. I am considering the same in the next few years. Employer-paid housing, no need for car, etc is a great opportunity to supercharge savings rates.
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I used to work for a similar company (Big Oil), but hated the job. The uplift for taking an overseas assignment can be *really* lucrative, especially if you don't maintain a residence stateside. For the several years I worked there, I kept hoping for an overseas (family-accompanied) assignment, but never had the chance. If I had, I might be already retired :)
That's awesome that you've reached the point where you feel FI.
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Great news!.. good for you in making it over the threashold!
Frank
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Nice work. Financially enlightened 20-somethings truly do have the world at their feet -- I wish I'd been one of them!
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Gold star for badassity!!
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Thanks for the congratulations and salutations, everyone!
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I recently achieved a net worth equal to 25x annual expenses (4% withdrawl rate) at Age 27! I translate this to mean that I will need to continue working for money in some form or fashion, but with the freedom to leave my current employer at any time and remain unemployed for a few years (i.e., FU Money).
I still have a ways to go, before reaching my FIRE Money Milestone, which I consider to be roughly 38x annual expenses (2.6% withdrawl rate).
With the notable exceptions of having been born to intelligent and industrious middle-class parents that paid my way through school, I have not enjoyed any significant windfalls or other unusual benefits that are not available to most other US citizens that attend state universities. I have achieved this milestone primarily by working hard to obtain employment in a well-paid field, in a well-paid industry, with a subjective merit-based compensation system. I have not received stock options, bonuses, or anything other than an annual salary that changes year-to-year based on performance, experience, and US labor market conditions.
Frugality has also played a part in this financial success. I would not be considered exceptionally frugal by MMM standards. However, my average annual expenses are significantly lower than those of my peers and co-workers.
Ultimately, my approach to personal finance has been similar to MMM's, and can be summarized as:
- Make financial independence a high priority (Make as much money as you can, as early as you can!)
- Enjoy hobbies and interests that are relatively cheap
- Base purchasing decisions primarily on relative "return on investment" (happiness/cost)
- Occasionally review and optimize costs, when it is worth the time and effort to do so
- Do NOT strictly budget expenses or savings (which could limit ability to take advangate of unforseen opportunities and/or cause unnecessary stress)
- Invest savings with the intention of maximizing long-term risk-adjusted total return, as appropriate for the market conditions (flexible asset allocation) and diversify these investments into businesses (stocks & bonds) or derivatives (ETFs, mutual funds) with transparent risks that I understand.
Congratulations! You are inspiring. I hope to be in your shoes when I'm 27. When I was running the numbers for the 22 year old working at Boeing https://forum.mrmoneymustache.com/ask-a-mustachian/case-study-22-year-old-boeing-mechanic/msg227525/#msg227525 , I realized that I would hit FI in 6.5 years if my salary stayed constant over that entire time. I know that I'm going to get a raise when I hit my 1-year mark (raises are handed out like clockwork once a year every year), so it'll be a little faster than that.
Your post could have been written by future me, except for #6. I have a hard time figuring out asset allocation, and it's partially because Mark Cuban hates it. http://blogmaverick.com/2011/01/24/wall-streets-new-lie-to-main-street-asset-allocation/