Author Topic: Any low income mustachians out there?  (Read 34429 times)

memorytoast

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Re: Any low income mustachians out there?
« Reply #100 on: July 05, 2017, 01:39:50 PM »
Not sure if everyone here is already aware of it - I saw this thread yesterday. It might appeal to some here. Saving to $10K. The person who started it started last November with $8.70 the first month, so definitely the kind of amounts some of us are dealing with.

Thanks, Moonwaves! That is a thread I'm glad to know about :)

thriftyc

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Re: Any low income mustachians out there?
« Reply #101 on: July 08, 2017, 11:40:35 AM »
I think it's important to remember that a lot of Mustachians didn't start out making $100k+ and having $1 million Vanguard portfolios. Many on here started out with low incomes, no assets, and massive debts, but patiently and consistently followed Mustachian principles which in time led to better financial outcomes.

So chin up if you are taking the first steps on your journey. FIRE might seem insurmountable now, but you will get more and more confident as you reach each goal you set and you watch your debts disappear and your investments grow. :-)

+1

Timothymaxy

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Re: Any low income mustachians out there?
« Reply #102 on: July 10, 2017, 09:14:11 PM »
Haven't saving any money due to I always got sick..kind of low income because spent lots of on medicine :(

MoonLiteNite

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Re: Any low income mustachians out there?
« Reply #103 on: July 12, 2017, 03:09:45 AM »
I am not sure if i am "low" anymore, my base pay is only 40k so that puts me at below average. But i work 60-80 hours a week, so the double time puts me at a more average income most of the time.

But even when i was making 7$/hr 8 years ago, i lived just the way i do now :) At the time i was only saving around 20% of my income, and it all was being dumped into my, now paid for, house.

ElleFiji

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Re: Any low income mustachians out there?
« Reply #104 on: July 12, 2017, 05:57:58 AM »
Haven't saving any money due to I always got sick..kind of low income because spent lots of on medicine :(
Hey, this is a hard place to be in. I can't tell if you're low income and low savings, but I'll assume you are.

Are you in a place with medical insurance? because even if you can't get everything covered by government medical insurance, it made a huge difference to me when I realized I spend about $140 on insurance plus about 40 on my partial payments, vs without insurance I would spend $250 on meds.

Paying that much for insurance wasn't easy - but when I did the math it actually saved me money. Sometimes if you look around for ideas about how really low income people are living, you find ways to save money. My rent includes water/hot water, so I hand wash about half my laundry loads and save money instead of going to the laundromat. BUT, as opposed to my able bodied friends, I spend more on eating out, because of fatigue. Other friends have given up cell phones if they are usually reachable by landline.

It's hard when the numbers add up so slowly, and then get wiped out fast by bills or unexpected sick days. But overtime you might eventually find that there is a balance in the bank.

SailorGirl

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Re: Any low income mustachians out there?
« Reply #105 on: July 12, 2017, 08:07:38 AM »
My first job (about 30 years ago) started at $18,000.  I started out putting enough into the 401k to get the company match (it was along the lines of - 10%my money matched by 15% company - no way I was passing that up) even though some meals were slices of bread dipped in free ketchup and mustard from the cafeteria.  I increased the contribution as I got raises to keep taxes low and quit after five years to go back to school.  I managed to save money on a grad school stipend (I am that cheap) and joined the Peace Corps after getting my masters.  Came back to get a job making $50-60K and I stayed around there for eight years, eventually dropping hours to take (free because I worked for the university) classes.  I bought a house in an expensive area by choosing a cheaper, non-updated structure and put in my own labor to improve it.  Eventually I lost my job but by that time I was living on about $25k and saving the rest (potentially for another degree that I didn't bother to pursue).

I suppose $60k isn't low income, but it was in the Seattle area, and with school and PC I have a lot of near-zero years in my 35-year ss reckoning. 

I also traveled to Europe several times and around the US a few times.

The 401k from my first job now makes up about half of my retirement portfolio with the rest from the last job (mandatory 7.5% contribution matched by the U). 

TL;DR:  Saving even a little makes a difference over the long haul, and, you can save even on a low income.

Lmoot

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Re: Any low income mustachians out there?
« Reply #106 on: July 12, 2017, 11:19:58 AM »
 I believe I am lower income by MMM standards. I have barely reached over $55k (and this is combining a full-time job, part-time job, and rental income from one property), and don't plan on increasing my active income much, if any. However only saving $150 a month, even per week, would give me anxiety. I take home less than 45K per year but save on average $2000 per month (right now that's about 65% of my income). Next year I am hoping to push myself to $2500 per month in savings, as some expensive bills drop off.

 Sometimes it can be discouraging here, not because so many others make so much more, but sometimes I don't think those who do, think of the limitations of those of us who make much less. For example the common assumption that everyone should be maxing out all retirement accounts, and if you are not, then it must be because of mal allocation of funds, instead of inability to save that much.

Because of how little I make, extreme early retirement is probably not within my grasp. I am currently 33,  cracking 100 K net worth, and do not earn enough to make much quicker headway. I am trying to bridge this gap though by investing in rental properties, which will hopefully provide enough passive income to allow me to at least live the working life I dream, which is a low-paying but highly fulfilling job, on part-time or seasonal basis. To me that is just as good as or better than early retirement. I think those that get the most turned on and passionate by extreme early retirement, are those for which it is more easily in grasp.  If I had to make the choice of retiring by age 50 instead of 67, or being a part time worker earning mostly passive income, with lots of downtime and extra cash for traveling and doing other things I enjoy, by age 39....the FIRE light gets dimmer. If I earned enough to be able to project in early retirement in my 30s, or even 40s, then FIRE might end up being more of a goal for me. Alas it is not, and retirement at age 50 is not a big enough carrot for me.
« Last Edit: July 12, 2017, 11:28:00 AM by Lmoot »

ministashy

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Re: Any low income mustachians out there?
« Reply #107 on: July 12, 2017, 02:33:09 PM »
Not sure if I would qualify as 'low income' or not, but this thread inspired me to delurk, so ...

I'm an artist with a day job (and have been for quite some time.)  Currently only make anywhere from $3-5K a year from art (which is the best I've ever done), so majority of my income is from the day job.  I've spent most of my life hovering around the $30-40K mark in a very HCOL area (greater Seattle area), but always managed to make it work.  I've always been conservative with money--never took out big loans, always saved up for things.  But I didn't understand investing or anything other than having a few hundred saved for a rainy day, for the most part.  My mindset from my 20's to mid-thirties was that if you weren't saving up FOR something (a move, Christmas presents, a car, whatever), or spending it, then what was money for anyway? 

Then in 2006, with the urging of the parental units, I bought a condo.  This turned out to be the worst possible time to buy--at the height of the market, right before the crash.  If I'd only waited two more years--but, as other posters have said, hindsight is 20/20.  I also lost my job two months after buying, which turned out to be a bit of a blessing in disguise.  I lined up a new job quickly, but being jobless with two mortgages for even that brief period of time 'scared me straight', as it were.  I started researching how to live on a budget, went from The Simple Dollar to Get Rich Slowly to MMM, which many side stops along the way at Bogleheads, Vanguard, etc.  Started realizing that I could save 'for' something after all--the chance to be a full-time artist, rather than trying to squeeze it around a 40 hr a week job. 

So I started cutting the fat, and  putting whatever I had left over in an IRA/401K/emergency fund.  MMM forums also started me aggressively pursuing salary bumps and better jobs, to the point that as of this year I'm making closer to 60K a year than 40 (which still doesn't go as far as I'd like as far as savings, but I love my HCOL area, so ....)  Approx. 10 years later, am now very grateful for my condo because rents are skyrocketing around here, and thanks to some additional cashflow from an inheritance, may actually have it paid off in a few more years, at which point I could afford to go part-time on the day job.   

I'm currently sitting at about a 30% savings rate (give or take--I'm HORRIBLE with numbers, even when the computer's doing all the work).  I'm not a monk--I take at least one low-cost vacation a year, and buy the occasional techie toy or other indulgence (mostly off of Craigslist or Amazon).  Occasionally I think of all the other fun toys/trips I could be buying with that 30% rather than socking it away where I can't touch it--but honestly, I'm very comfortable where I'm at, and I'm hoping my plan will pay off in the long run.  *crosses fingers and hopes the ACA sticks around*

memorytoast

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Re: Any low income mustachians out there?
« Reply #108 on: July 12, 2017, 06:05:33 PM »
Not sure if I would qualify as 'low income' or not, but this thread inspired me to delurk, so ...

So good to hear your story, ministashy! Glad you decided to "delurk" and wishing you much success :)

SwordGuy

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Re: Any low income mustachians out there?
« Reply #109 on: July 12, 2017, 06:15:05 PM »
I believe I am lower income by MMM standards. I have barely reached over $55k (and this is combining a full-time job, part-time job, and rental income from one property), and don't plan on increasing my active income much, if any. However only saving $150 a month, even per week, would give me anxiety. I take home less than 45K per year but save on average $2000 per month (right now that's about 65% of my income). Next year I am hoping to push myself to $2500 per month in savings, as some expensive bills drop off.

 Sometimes it can be discouraging here, not because so many others make so much more, but sometimes I don't think those who do, think of the limitations of those of us who make much less. For example the common assumption that everyone should be maxing out all retirement accounts, and if you are not, then it must be because of mal allocation of funds, instead of inability to save that much.

Because of how little I make, extreme early retirement is probably not within my grasp. I am currently 33,  cracking 100 K net worth, and do not earn enough to make much quicker headway. I am trying to bridge this gap though by investing in rental properties, which will hopefully provide enough passive income to allow me to at least live the working life I dream, which is a low-paying but highly fulfilling job, on part-time or seasonal basis. To me that is just as good as or better than early retirement. I think those that get the most turned on and passionate by extreme early retirement, are those for which it is more easily in grasp.  If I had to make the choice of retiring by age 50 instead of 67, or being a part time worker earning mostly passive income, with lots of downtime and extra cash for traveling and doing other things I enjoy, by age 39....the FIRE light gets dimmer. If I earned enough to be able to project in early retirement in my 30s, or even 40s, then FIRE might end up being more of a goal for me. Alas it is not, and retirement at age 50 is not a big enough carrot for me.

I don't understand your conclusions.   With a savings rate of 65% and a stash, today, of $0, you should be fire in about 10.5 years, which would put you at age 44.  And you've already gotten a stash built up, it should take you les time!  If you do a good job on the real estate, you might do even better!

I don't understand why you think you need to wait until your 50s.

Lmoot

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Re: Any low income mustachians out there?
« Reply #110 on: July 12, 2017, 06:30:44 PM »
I believe I am lower income by MMM standards. I have barely reached over $55k (and this is combining a full-time job, part-time job, and rental income from one property), and don't plan on increasing my active income much, if any. However only saving $150 a month, even per week, would give me anxiety. I take home less than 45K per year but save on average $2000 per month (right now that's about 65% of my income). Next year I am hoping to push myself to $2500 per month in savings, as some expensive bills drop off.

 Sometimes it can be discouraging here, not because so many others make so much more, but sometimes I don't think those who do, think of the limitations of those of us who make much less. For example the common assumption that everyone should be maxing out all retirement accounts, and if you are not, then it must be because of mal allocation of funds, instead of inability to save that much.

Because of how little I make, extreme early retirement is probably not within my grasp. I am currently 33,  cracking 100 K net worth, and do not earn enough to make much quicker headway. I am trying to bridge this gap though by investing in rental properties, which will hopefully provide enough passive income to allow me to at least live the working life I dream, which is a low-paying but highly fulfilling job, on part-time or seasonal basis. To me that is just as good as or better than early retirement. I think those that get the most turned on and passionate by extreme early retirement, are those for which it is more easily in grasp.  If I had to make the choice of retiring by age 50 instead of 67, or being a part time worker earning mostly passive income, with lots of downtime and extra cash for traveling and doing other things I enjoy, by age 39....the FIRE light gets dimmer. If I earned enough to be able to project in early retirement in my 30s, or even 40s, then FIRE might end up being more of a goal for me. Alas it is not, and retirement at age 50 is not a big enough carrot for me.

I don't understand your conclusions.   With a savings rate of 65% and a stash, today, of $0, you should be fire in about 10.5 years, which would put you at age 44.  And you've already gotten a stash built up, it should take you les time!  If you do a good job on the real estate, you might do even better!

I don't understand why you think you need to wait until your 50s.

Half of my net worth is in my rental property. Most of the other half is in 401(k)/ROTH which I can't touch until 59 1/2.  I only have 20K in cash, which I'm saving up to pay down 0% debt ($35k) and invest in future rentals.  I don't earn enough income to both invest in rental income and stash cash at a high rate, the same time. I think your calculation is assuming I would put all of my resources or most of them, into stashing. I had to make the decision to focus hard on one or the other, in order to make any respectable headway in either; I chose real estate. For me to stash and invest in real estate, would likely put me at 50 for FIRE. Today almost every single one of my dollars is marked for near future expenses for at least the next few years as I grow my crop of properties.

Also I am hoping for a lifestyle change while still in my 30s, even if it's 39, and something as minor as taking a break from working full time to go back to school. Stashing at my income level won't give that to me in that time period I'm afraid.
« Last Edit: July 12, 2017, 06:51:33 PM by Lmoot »

monstermonster

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Re: Any low income mustachians out there?
« Reply #111 on: July 12, 2017, 10:31:11 PM »
You can get access to your 401K and your Roth earlier, look up "Roth ladder".

But if you have that many rental properties, hopefully they can pay your expenses before retirement age?

Timothymaxy

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Re: Any low income mustachians out there?
« Reply #112 on: July 13, 2017, 01:43:43 AM »
Haven't saving any money due to I always got sick..kind of low income because spent lots of on medicine :(
Hey, this is a hard place to be in. I can't tell if you're low income and low savings, but I'll assume you are.

Are you in a place with medical insurance? because even if you can't get everything covered by government medical insurance, it made a huge difference to me when I realized I spend about $140 on insurance plus about 40 on my partial payments, vs without insurance I would spend $250 on meds.

Paying that much for insurance wasn't easy - but when I did the math it actually saved me money. Sometimes if you look around for ideas about how really low income people are living, you find ways to save money. My rent includes water/hot water, so I hand wash about half my laundry loads and save money instead of going to the laundromat. BUT, as opposed to my able bodied friends, I spend more on eating out, because of fatigue. Other friends have given up cell phones if they are usually reachable by landline.

It's hard when the numbers add up so slowly, and then get wiped out fast by bills or unexpected sick days. But overtime you might eventually find that there is a balance in the bank.

Thank u..I got insurance before, but the problem is I got sick every time that I got my monthly salary, the rent, the daily life fee is big cost too. But I will take care myself, after all, half of the sickness trouble is psychological.


Lmoot

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Re: Any low income mustachians out there?
« Reply #113 on: July 13, 2017, 04:30:42 AM »
You can get access to your 401K and your Roth earlier, look up "Roth ladder".

But if you have that many rental properties, hopefully they can pay your expenses before retirement age?

Yeah, I questioned how possible it was to get money out early as I wrote that, bc I remember reading different strategies on here. I only have the one rental property now, so that's why I am expecting most of my resources for the next 5 years will be going towards getting more. I want to earn enough income through the properties and a replacement job at lower pay, to save the equivalent of about 50% of my current earnings, plus maintain a $5k/year/property expense and buffer fund, before even thinking of quitting my current full time job.

I know holding off on market investing is pretty much the opposite of MMM goals, and I think at the beginning of my journey which started, like for many, around the recession,  my intention was to work hard and retire early. But as I get older, I have been losing that desire, and instead I'm merely seeking a more rewarding working life, with more free time. It also seems like it's easier to achieve than extreme early retirement, so that could be it too LOL. Also has to do with the fact that the type of career I seek is extremely physical, and typically requires a science degree (I have an English degree), and if I wait until I am FIRE, add on several years for education, internships, and seeking jobs, I will be over 50 by the time I get there.  Not that there aren't some badass, fit 50-year-olds out there, but the earlier the better. Luckily I have already invested five years of my life to this "next" career, and currently work part time at one of the employers I hope to work for post-degree (currently in a position I do NOT feel qualified in, but have happily been growing into; I treat it as a paid internship and am learning as I can both on my own and using resources at work).

RamonaQ

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Re: Any low income mustachians out there?
« Reply #114 on: July 14, 2017, 11:03:58 AM »
I didn't notice it until recently, but I think there is a slight hint of elitism on this site in regards to low income individuals.
Correct. But to be fair, people who are low-income are less willing to put their numbers out there and talk details than people who are high-income. We see this also in people talking about running their small business: some have a very small business (like me), it does make money but they won't talk details...

The elitism can be a little difficult to handle sometimes for people with low incomes, because people with low incomes often are coming from a bad place psychologically when they are trying to turn things around for themselves.

Sometimes, it feels like some people on this forum blame low income people for their circumstances. The "face punches" can be a little cruel sometimes. Yeah, there are things that low income people can do to improve themselves financially, but it can be hard to unlearn negative habits and find the courage to take financial risks. Also, there are many factors beyond the control of low income people that put them in a difficult situation.

I would encourage more low income people on this forum to tell their stories and I would encourage the high income people to be a little kinder and more supportive of people starting out on a difficult journey.
Also many low income earners are purposely choosing professions they find more altruistic then a job that may earn them big bucks. For some people turning their backs on high paying jobs in lieu of one with more meaning and purpose is what's important to them rather than saving a massive $$ amount for a champagne-fuelled FIRE life.

Altruism is all well and good -- I do a lot of charity work myself -- but it's beneficial for people to increase their earnings as much as possible because that will allow them to do more good with their wealth. I have been able to help so many people, especially the poor and hungry, because I was able to improve my financial situation. There are literally a whole lot of people who are fed, clothed, sheltered, and educated only because I increased my income.
and there are an equal amount of people who are doing the actual clothing, sheltering, feeding, educating, supporting, and care giving on low incomes. I agree earning more money and donating it to charitable causes is always a good thing but there needs to be boots-on-the-ground people doing the actual physical work to make things successful. I also wasn't just talking about charitable work but those lower income jobs (like caregiver, daycare worker, EMT, rescue workers, social workers, military, law enforcement, environmental fields,  teachers,  ministers, etc...) who aren't paid much but do important work.

If there's one big overarching important lesson that I've learned about life, it's "Don't Be A Martyr". Honestly, do charity work because you are a good person, but don't make it your occupation. It hurts you. It hurts your cause. It hurts everybody. Get money because it makes everything better.

Sounds cold, I know, but it's helpful advice.
Sorry to hear you feel this way especially after reading your post in the "Stories from the Poor" thread where it seemed you had a lot of people who choose lower income jobs (social workers, teachers, counslors, etc...) who helped you get to where you are today.

In any case my point was that people choose career paths for many other reasons besides money. And some of those career paths are low income but may have more meaning and/or interest to those people than higher income careers. I would never consider those people "suckers" or "unmotivated slackers who should strive to do better" if their career choices align with their interests and values regardless of the pay. There are a lot of paths to FI and taking a longer route to get there so you can do what you love is a pretty damn awesome thing to do IMHO.

I'm one of those people who is doing lower paid work because I love it and think it's important.

About 6 years ago I was working in marketing, making about $80k.  I'm sure I could be making over $100k now if I stayed in that field.  But I hated it.  I woke up every morning and my first thought was "I hate my job".  It was soul crushing.

I am now a librarian and make around $43k from my primary job (I also have some side hustles).  While there are frustrations at any job, I like what I do now.  I feel like I really get to impact the lives of children and teens in a positive way.

I understand the logic of saying that if I stayed working at a higher paying job, I could get to FI faster and donate more to libraries and literacy organizations and that would have a bigger impact.  But I would be miserable.  I am interested in MMM and FI because I want the freedom to do what makes me happy.  Part of what makes me happy is doing work I find meaningful. 

SwordGuy

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Re: Any low income mustachians out there?
« Reply #115 on: October 03, 2019, 09:43:22 PM »
I've started a low income Race to FI where you track your FI % -- the % of the passive income you need to FIRE that you already have.   

I think it would be great for folks to have a common place to track progress and encourage each other.

https://forum.mrmoneymustache.com/throw-down-the-gauntlet/race-to-100-fi-(only-if-below-median-household-income!!!)/

Lmoot

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Re: Any low income mustachians out there?
« Reply #116 on: October 04, 2019, 03:32:57 AM »
I believe I am lower income by MMM standards. I have barely reached over $55k (and this is combining a full-time job, part-time job, and rental income from one property), and don't plan on increasing my active income much, if any. However only saving $150 a month, even per week, would give me anxiety. I take home less than 45K per year but save on average $2000 per month (right now that's about 65% of my income). Next year I am hoping to push myself to $2500 per month in savings, as some expensive bills drop off.

 Sometimes it can be discouraging here, not because so many others make so much more, but sometimes I don't think those who do, think of the limitations of those of us who make much less. For example the common assumption that everyone should be maxing out all retirement accounts, and if you are not, then it must be because of mal allocation of funds, instead of inability to save that much.

Because of how little I make, extreme early retirement is probably not within my grasp. I am currently 33,  cracking 100 K net worth, and do not earn enough to make much quicker headway. I am trying to bridge this gap though by investing in rental properties, which will hopefully provide enough passive income to allow me to at least live the working life I dream, which is a low-paying but highly fulfilling job, on part-time or seasonal basis. To me that is just as good as or better than early retirement. I think those that get the most turned on and passionate by extreme early retirement, are those for which it is more easily in grasp.  If I had to make the choice of retiring by age 50 instead of 67, or being a part time worker earning mostly passive income, with lots of downtime and extra cash for traveling and doing other things I enjoy, by age 39....the FIRE light gets dimmer. If I earned enough to be able to project in early retirement in my 30s, or even 40s, then FIRE might end up being more of a goal for me. Alas it is not, and retirement at age 50 is not a big enough carrot for me.

I don't understand your conclusions.   With a savings rate of 65% and a stash, today, of $0, you should be fire in about 10.5 years, which would put you at age 44.  And you've already gotten a stash built up, it should take you les time!  If you do a good job on the real estate, you might do even better!

I don't understand why you think you need to wait until your 50s.

Half of my net worth is in my rental property. Most of the other half is in 401(k)/ROTH which I can't touch until 59 1/2.  I only have 20K in cash, which I'm saving up to pay down 0% debt ($35k) and invest in future rentals.  I don't earn enough income to both invest in rental income and stash cash at a high rate, the same time. I think your calculation is assuming I would put all of my resources or most of them, into stashing. I had to make the decision to focus hard on one or the other, in order to make any respectable headway in either; I chose real estate. For me to stash and invest in real estate, would likely put me at 50 for FIRE. Today almost every single one of my dollars is marked for near future expenses for at least the next few years as I grow my crop of properties.

Also I am hoping for a lifestyle change while still in my 30s, even if it's 39, and something as minor as taking a break from working full time to go back to school. Stashing at my income level won't give that to me in that time period I'm afraid.

Clarifying my post from 2 years ago lol! Just bc I can put 65% of my income into savings (right now it’s dropped to around 50%). Doesn’t mean it’s allocated for early retirement. Most of it is to pay off nearly $50k in debt (0% interest). Some is efund, and a growing portion is for upcoming expenses. So I guess it’s technically short term savings. I just park it in a high yields account earning 2% until I am ready to use it. That is another thing I feel higher earners don’t get.

Many of us do not have the luxury of keeping our savings rolling forever. Because we don’t earn enough to pay for large future expenses through our paycheck. So often times our savings are constantly revolving in and out, to pay for things. But the assumption around here as always when you say savings that you are referring to money that’s there forever for retirement. Right now the only cash I can guarantee will be there in 10 years is whatever I send to my 401(k), up to the company match.

Aside from my emergency fund, I literally have a short term plan for every single dollar currently in my savings account. And none of it is for early retirement, unless I plan on retiring in five years which I don’t.

So yes, if I applied everything I am able to carve out of my paycheck and set aside each month, I could retire in 10 to 15 years. But that ignores Doing anything else. Anything else like traveling to visit family, or paying a $12,000 plumbing and sewer repair bill, or last week it was a $3000 driveway repair bill. Or one day replacing my 17-year-old car. I don’t have the luxury of setting tons of money aside just for retirement. Because life happens between now and retirement (even early retirement). Life that costs money that my paycheck I can’t cover so I need to get it from savings.
« Last Edit: October 04, 2019, 03:39:35 AM by Lmoot »

Dicey

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Re: Any low income mustachians out there?
« Reply #117 on: October 04, 2019, 07:10:46 AM »
Clarifying my post from 2 years ago lol! Just bc I can put 65% of my income into savings (right now it’s dropped to around 50%). Doesn’t mean it’s allocated for early retirement. Most of it is to pay off nearly $50k in debt (0% interest). Some is efund, and a growing portion is for upcoming expenses. So I guess it’s technically short term savings. I just park it in a high yields account earning 2% until I am ready to use it. That is another thing I feel higher earners don’t get.

Many of us do not have the luxury of keeping our savings rolling forever. Because we don’t earn enough to pay for large future expenses through our paycheck. So often times our savings are constantly revolving in and out, to pay for things. But the assumption around here as always when you say savings that you are referring to money that’s there forever for retirement. Right now the only cash I can guarantee will be there in 10 years is whatever I send to my 401(k), up to the company match.

Aside from my emergency fund, I literally have a short term plan for every single dollar currently in my savings account. And none of it is for early retirement, unless I plan on retiring in five years which I don’t.

So yes, if I applied everything I am able to carve out of my paycheck and set aside each month, I could retire in 10 to 15 years. But that ignores Doing anything else. Anything else like traveling to visit family, or paying a $12,000 plumbing and sewer repair bill, or last week it was a $3000 driveway repair bill. Or one day replacing my 17-year-old car. I don’t have the luxury of setting tons of money aside just for retirement. Because life happens between now and retirement (even early retirement). Life that costs money that my paycheck I can’t cover so I need to get it from savings.
Having those savings, no matter what they are labeled, is still a huge help. It keeps your head above water when life hands you shit sandwiches. It also gives you confidence in your ability to be in control of your life. I used to do the same thing. That money was never invested in equities, because I knew I was going to need it. I kept contributing to my 401k, slowly ratcheting up my contributions a tiny increments. In time, it grew to be real money. Just keep on keeping on. You're doing the right things. It may take a little longer to get there, but get there you will.
« Last Edit: October 09, 2019, 05:28:32 AM by Dicey »

Lmoot

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Re: Any low income mustachians out there?
« Reply #118 on: October 09, 2019, 03:28:28 AM »
Clarifying my post from 2 years ago lol! Just bc I can put 65% of my income into savings (right now it’s dropped to around 50%). Doesn’t mean it’s allocated for early retirement. Most of it is to pay off nearly $50k in debt (0% interest). Some is efund, and a growing portion is for upcoming expenses. So I guess it’s technically short term savings. I just park it in a high yields account earning 2% until I am ready to use it. That is another thing I feel higher earners don’t get.

Many of us do not have the luxury of keeping our savings rolling forever. Because we don’t earn enough to pay for large future expenses through our paycheck. So often times our savings are constantly revolving in and out, to pay for things. But the assumption around here as always when you say savings that you are referring to money that’s there forever for retirement. Right now the only cash I can guarantee will be there in 10 years is whatever I send to my 401(k), up to the company match.

Aside from my emergency fund, I literally have a short term plan for every single dollar currently in my savings account. And none of it is for early retirement, unless I plan on retiring in five years which I don’t.

So yes, if I applied everything I am able to carve out of my paycheck and set aside each month, I could retire in 10 to 15 years. But that ignores Doing anything else. Anything else like traveling to visit family, or paying a $12,000 plumbing and sewer repair bill, or last week it was a $3000 driveway repair bill. Or one day replacing my 17-year-old car. I don’t have the luxury of setting tons of money aside just for retirement. Because life happens between now and retirement (even early retirement). Life that costs money that my paycheck I can’t cover so I need to get it from savings.
Having those savings, no matter what they are labeled, is still a huge help. It keeps your head above water when life hands you shit sandwiches. It aldo gives you confidence in your ability to be in control of your life. I used to do the same thing. That money was never invested in equities, because I knew I was going to need it. I kept contributing to my 401k, slowly ratcheting up my contributions a tiny increments. In time, it grew to be real money. Just keep on keeping on. You're doing the right things. It may take a little longer to get there, but get there you will.

Thank you for the encouragement Dicey. I know I can be doing more (learning about indexes and carving out some money aside to invest), but for the time being as long as I am going in the right direction, I'm not stressing over optimization. I'll get there. I've given up on early retirement, fortunately mostly because I determined it wasn't for me. But I still want to live a life of optional leisure, so I'm working towards that.

 

Wow, a phone plan for fifteen bucks!