Author Topic: Anyone not making +100k & making good progress? Please share your success story.  (Read 18561 times)

westcoastarlo

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Hi, so I just read a recent article MMM retweeted about a couple who just retired at 30 with 1 million in the savings. Amazing!!!

I clicked through to read their story a little more and learned that towards the end, their combined salary was somewhere in the +230k range. Wowzaa and that they spent ~48,000/yr.

Given that the average US household makes $50,000 (before taxes), what hope do us little guys have in FI.

Please share your "average Joe" stories. I'd love to hear how you are making it work.


Exflyboy

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Only at the very end of my FI journey were we making $100k+.. see my link below for hours of reading..:)

justajane

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I don't know if we are average Joes, but my husband didn't start making the 90K he does now until his forties. At age 30, he was making about 45K. I was a graduate student making less than 20K until I became a stay at home mom when I was 32. Now at 42 and 38, we have a net worth of about 400K (including house equity of 100K). Two advantageous decisions for us were driving modest cars that we paid cash for and just not buying a lot of shit once we got married. We also don't really travel that much. My husband also started contributing to his retirement by the age of 22. That, combined with the match, has led him to have 200K in 401K. He has never maxxed out his 401K (which is sort of MMM sacrilege).

But the single biggest decision we have made is to buy a modest, smaller home in a LCOL area. Smaller mortgage, less utilities, less cost. Having three kids has slowed our savings down, but I'm still pretty proud of what we have accomplished. We're not really interested in ER as much as FI.

sol

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I think you're confusing the dollar figure target with the age target.  They are very different, and not really comparable for people of different incomes.  If you make $500k/year, then saving a million dollars at any age isn't very impressive. 

As MMM has pointed out, your total income is only relevant to your target retirement age because it contributes to your savings rate.  It's the savings rate that determines whether you retire at 30 or 70, regardless of what your income is.  Saving 50% of $500k/year and 50% of $50k/year result in the exact same retirement date.

So it sounds to me like what you're really asking is for stories of people who have high savings rate on low incomes.  We have tons of those here.  I've seen at least four or five people with savings rates above 80%.  Go dig up arebelspy's story of retiring at age 30 on two teacher salaries.

My family's savings rate is only about 60%.  That's pretty unimpressively average around here.

brokescientist

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I just starting making 60K a year up from 45k, my wife makes 50k.   

We have been saving pretty well almost >50% of pay now for 1.5 years and have been working for 2.5.

Including the value of our home (200k) and mortgage (-160k) our net worth is ~140k not including our dumb cars. 

Lots of slow roasted Pork Shoulders(bone in),  Pork Soup,  Baked Whole Chicken, Chicken Soup rotations :)

westcoastarlo

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Thanks everyone for your input.

Exflyboy: Yes, hours of reading indeed :)
Justajane: Loved your perspective.
Sol: Good to be reminded to keep the focus on savings rate and not to play the comparison game. And if you do, at least play in the right league/division ;)
Brokescientist: "When a man's stomach is full it makes no difference whether he is rich or poor."
Euripides

Much appreciation!


frugalstudio

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I'm a photographer and my wife was a Montessori teacher who started her own small school. I did start saving into an IRA using index mutual funds just after college, but we have never had great incomes until the last few years of the 90s. There were a few parts to the recipe, and most are commonly seen in articles that I have read here. 1) Save a huge percentage of your income, and put it to work in productive investments. 2) Work your ass off--for us this meant 60-80 hour weeks every week for most of our 20s and 30s doing our main careers + bartending / waiting tables / construction work etc.
We had a couple of "lucky" breaks that accelerated the process for us a bit. We bought our first house at a major discount during a recession in 1990. We got a fixer upper duplex for about half what the market value had been 3-4 years earlier by sheer luck. We had no idea what we were getting. After fixing that property and renting half for 10 years we learned a good bit about real estate renovation and renting! Then in 1999, I read a crazy book that warned of a stock market collapse. Again, the savings and decisions had been sort of luck and default, but by then we had saved nearly $800k on moderate incomes because of the stock market advances over 20 years with dollar cost averaging. I panicked and sold all our funds and went into capital preservation funds right at the end of 1999, and we also sold our house for a large profit which made us millionaires at the age of 39. This was all relative ignorant timing though we DID save the money. The problem over the following 7-8 years was that feeling of smugness took over after then nasdaq crashed, but then bewilderment as the general S&P market rallied to new highs toward 2007. There was lots of activity in that time for us--I bought a studio building and a too fancy house (both with mortgages) since we felt powerful and rich with money in the bank. We were still earning under $100K combined though. We were still totally out of the stock market from 1999, which actually caused stress when it was going up.  Another lucky life event happened in 2007 and my wife decided to quit the school she had started and left it with a partner to pursue more academic work. Soon after, I saw that it was foolish to have the 2 mortgages, so we added a roof apartment to the studio building and sold the house near the top of the market (we were not to be so lucky with the studio building). Business was decent though, and the mortgage was acceptable for combined work / live. We sold that building in 2014 but lost about $70K in the process if mortgage payments, renovations etc are taken into account. Meanwhile, I realized that I had to take more investment risk as we were certainly not gaining anything in the low interest rate environment! I read probably hundreds of books, and have finally landed on a pair of strategies that have good historical gain probabilities and risk reduction as well. They aren't exactly MMM approved in that they involve somewhat more active trading. Either way, I have to be able to sleep at night. The final piece of the puzzle is that we had paid off the studio building before selling, and the cash from the sale allowed us to buy our current house and two small rental houses in our community. I still do photography work and my wife has been writing and earning a bit that way, but we do these by choice and are independent without the need for the income. Years of practicing a frugal lifestyle helps immeasurably now.
Looking back on it, it seems sort of inevitable. But the lucky parts still give me pause. What would have happened if we had not sold investments in 1999? Would I have panicked at the bottom and lost 50%? What about 08-09? I'm not sure. So I know there are few guarantees and only the parts you control are really in control...parts 1 and 2 above.
« Last Edit: November 29, 2015, 10:19:02 PM by Groverstudio »

albireo13

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story of the entitled

stlbrah

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~83k/yr. FI will come around age 35. I may hit 100k/r in a few years, but I don't put a ton of thought into it because I am not much of a careerist. My work ethic is that I will put in a hard 40 hours but time after that is mine besides rare occasions/work emergencies that rarely ever happen.

use2betrix

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story of the entitled

Because they make a high income?

ReadySetMillionaire

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I turn 28 in a couple weeks. I am an attorney (so just started my career last year) and make $47,500 per year. My GF makes $67,500 per year but our finances are not combined yet, so the budget I'm about to post is just my plan for next year.

Income and 401k
Income (Pre-Tax Yearly): $47,500
Income (Pre-Tax Monthly): $3958

401k Max ($18,000): $1,500/month
Monthly Income (Pre-Tax, Post 401k Contribution): $2498
Monthly Income (Post Tax): $1748

Monthly Expenses
Mortgage (My Half): $430
Utilities (My Half): $100
DirecTV (My Half): $42
Student Loans: $190
Car Insurance: $65
Gas: $75
Cell Phone: $75
Groceries: $250
Dry Cleaning: $30
Social/Miscellaneous: $100
Total: $1,357

That leaves me with about $400 in cushion, which I intend to either put in a savings fund or a Traditional IRA, or maybe even throw an extra $100 to the mortgage. I'll decide as the  year goes on.

Note that just maxing my 401k gives me a savings rate of about 38%, which means I have between 22 and 25 years of work until retirement (so about age 50). But I do plan to increase income, not increase my spending rate, and thus increase my savings rate...which should lead to an even quicker retirement (goal is age 45).

So while I am not quite a success story yet (just two years into this), here's what I'd recommend:

(1) Buy a smaller, affordable house in a low COL area (or rent a cheaper apartment). We bought an 1100 square foot ranch in northeast Ohio. Mortgage is low, utilities are low, and we buy less stuff because we don't have anywhere to put it.

(2) You'll also notice I don't have a car payment. That's a big, big deal when your income is not six figures. Furthermore, my commute is about 12 miles round trip. I have to fill up about every 2.5 weeks...so my fuel costs are very low (the $75 factors in road trips I like to take).

(3) Establish a comfortable standard of living and stick with it. People don't retire because they increase living expenses as their income increases. Don't do this. Keep your starter home. Keep your cars as long as they get you from A to B.

(4) Split your expenses. If you don't have a significant other, find a roommate. This saves me about $550/month.
« Last Edit: November 30, 2015, 07:58:31 AM by ReadySetMillionaire »

rubybeth

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Hi, so I just read a recent article MMM retweeted about a couple who just retired at 30 with 1 million in the savings. Amazing!!!

I clicked through to read their story a little more and learned that towards the end, their combined salary was somewhere in the +230k range. Wowzaa and that they spent ~48,000/yr.

Given that the average US household makes $50,000 (before taxes), what hope do us little guys have in FI.

Please share your "average Joe" stories. I'd love to hear how you are making it work.

Well, DH and I are 34 and right now we are living on just my income while DH is finishing up his last year in grad school (internship makes working difficult if not impossible). My salary + benefits is around $60k annually, which still feels like a pretty great salary compared to the years I was making $30k. We are paying tuition, medical insurance, went to Europe this spring, and will still save about $20k this year, not including the approximately $3.5k that goes into my pension. It's not a super impressive savings rate right now, but we have no debt and aren't taking on any debt. It feels good. We don't know what DH's income will be, but I'm hoping it will be $40k+, which will push us combined into the $100k range. We likely won't retire until closer to age 50, but that's better than age 65+.

Gin1984

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My husband and I make a total of $75K plus have a child whose daycare costs over $10K.  We save about $25K/year and hope to increase that this year.

Bearded Man

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I think you're confusing the dollar figure target with the age target.  They are very different, and not really comparable for people of different incomes.  If you make $500k/year, then saving a million dollars at any age isn't very impressive. 

As MMM has pointed out, your total income is only relevant to your target retirement age because it contributes to your savings rate.  It's the savings rate that determines whether you retire at 30 or 70, regardless of what your income is.  Saving 50% of $500k/year and 50% of $50k/year result in the exact same retirement date.

So it sounds to me like what you're really asking is for stories of people who have high savings rate on low incomes.  We have tons of those here.  I've seen at least four or five people with savings rates above 80%.  Go dig up arebelspy's story of retiring at age 30 on two teacher salaries.

My family's savings rate is only about 60%.  That's pretty unimpressively average around here.

This is all true, but you leave out the fact that it's hard for someone making say, 20K a year is going to have a hard time living off 3K a year while they save the rest of it (after taxes). This is easily possible if you live with your parents, take public transport, and eat your parents food. But saving enough for 25 times expenses isn't really that great in this scenario unless you plan on living with your parents for life, and in reality, you are still not FI, just mooching. I have friends well into their 30's and 50's still mooching off their parents for education, housing, food, rent, car, you name it.

Savings rate is great, but it is not as simple as you make it out to be. It's easier to save most of your money and still live a decent lifestyle when making big bucks, than it is to do it off minimum wage...

THAT is what the OP is getting at, and it is a valid point. IMO, your time to retirement will either be longer, or you will need to cut back drastically. I'm not so sure that the cut back drastically is sustainable long term. Even Jacob moved out of his RV and into a house...But that was a more strategic decision. The stock market had gone up drastically. He merely took some of his profit and invested it in a different vehicle. Now his house has gone up 75% in value and he is living a better lifestyle, a normal middle class lifestyle.
« Last Edit: November 30, 2015, 10:06:19 AM by Bearded Man »

ditheca

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I make 72k (up this year, previously 48k), DW is a stay at home mother of three, and is currently working on a bachelors degree.

It took us 10 years to get to 100k net worth because we didn't know what we were doing. I only started looking for good ways to spend my money once I got the big raise. 12 more years of 50% savings rate will get us to FIRE right as our youngest child starts college.

We make it work by living in a little house and enjoying people more than things.  We enjoy church, scouting, game night with friends, and old videogames.

andy85

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Currently make right around $45k. All of my calculations, from worst case to best case, indicate retirement at 50 is easily doable. If i can keep my spending under 30k, get 3 small raises (on top of COLA bumps) then there is no reason i couldnt have 400k at 40, close to 800k at 45, and 1.3mil by 50. Those are the 3 ages i like to look at.

According to my plan, I wont even be maxing my 401k until 2019, and i only plan to put more into my roth ira once i have maxed the 401k. First year i can max both based on my calculations is 2022. All about discipline...slow and steady with a modest income is the name of the game.

Car will be paid off in October of 2017 (268/month). Bought a small house...PITI is about $557/month. A roommate putting in $300/month helps that out. Otherwise, i wont have any debt after my CC is paid off early next year.

ReadySetMillionaire

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This is all true, but you leave out the fact that it's hard for someone making say, 20K a year is going to have a hard time living off 3K a year while they save the rest of it (after taxes). This is easily possible if you live with your parents, take public transport, and eat your parents food. But saving enough for 25 times expenses isn't really that great in this scenario unless you plan on living with your parents for life.

Savings rate is great, but it is not as simple as you make it out to be. It's easier to save most of your money and still live a decent lifestyle when making big bucks, than it is to do it off minimum wage...

THAT is what the OP is getting at, and it is a valid point. IMO, your time to retirement will either be longer, or you will need to cut back drastically. I'm not so sure that the cut back drastically is sustainable long term. Even Jacob moved out of his RV and into a house...

I'd say OP's main concern is more about retirement age than having a borderline poverty income. He or she talked about a couple retiring in their 30s with a high income.

As OP's post indicates, that's not feasible on a middle class income. But as other posters have shown, if you keep your expenses low enough, you can set yourself up to retire at 45-50...and that's 15-20 years ahead of 80% of the population.

arebelspy

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This is all true, but you leave out the fact that it's hard for someone making say, 20K a year is going to have a hard time living off 3K a year while they save the rest of it (after taxes). This is easily possible if you live with your parents, take public transport, and eat your parents food. But saving enough for 25 times expenses isn't really that great in this scenario unless you plan on living with your parents for life.

Savings rate is great, but it is not as simple as you make it out to be. It's easier to save most of your money and still live a decent lifestyle when making big bucks, than it is to do it off minimum wage...

THAT is what the OP is getting at, and it is a valid point. IMO, your time to retirement will either be longer, or you will need to cut back drastically. I'm not so sure that the cut back drastically is sustainable long term. Even Jacob moved out of his RV and into a house...

I'd say OP's main concern is more about retirement age than having a borderline poverty income. He or she talked about a couple retiring in their 30s with a high income.

As OP's post indicates, that's not feasible on a middle class income. But as other posters have shown, if you keep your expenses low enough, you can set yourself up to retire at 45-50...and that's 15-20 years ahead of 80% of the population.

I am living proof that's not true.

My first year out of college, I started at 32k as a teacher. My wife, as a part time substitute, made maybe 18k (then got a job as a full time teacher the next year).

Our final pay was 44k/yr. each. That was after working 8 years, and getting Master's degrees. Our salary cost of living increases were frozen for several years due to the recession, so most of that increase was the boost from the extra education.

Nearly a decade of experience, plus Master's degrees, and we still didn't hit even 90k combined, let alone 100k.

But we hit the 7-figure mark, and FIRE'd by 30.

Lots of extra income from side-gigs and other paid optional work, combined with a high savings rate, and investment into assets (real estate) that allowed us to put in extra effort for extra returns (not passive, but compensated by giving higher returns).

If your primary job won't get you to FIRE as quick as you'd like, you need to find other strategies to boost yourself and decrease your time to FIRE.

We loved our jobs, otherwise we'd have gone and done something more lucrative. It was worth it to us to keep those jobs, but since we still wanted to FIRE quickly, we made up for that via other paid work and savings and investing.

It was hard work, no doubt. We didn't take summers off, like we could have as teachers. But we made it work. (In fact, we retired younger, and with more money, than the people in the article.) You can too!  :)
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with two kids.
If you want to know more about us, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.

ReadySetMillionaire

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I am living proof that's not true.

My first year out of college, I started at 32k as a teacher. My wife, as a part time substitute, made maybe 18k (then got a job as a full time teacher the next year).

Our final pay was 44k/yr. each. That was after working 8 years, and getting Master's degrees. Our salary cost of living increases were frozen for several years due to the recession, so most of that increase was the boost from the extra education.

Nearly a decade of experience, plus Master's degrees, and we still didn't hit even 90k combined, let alone 100k.

But we hit the 7-figure mark, and FIRE'd by 30.

Lots of extra income from side-gigs and other paid optional work, combined with a high savings rate, and investment into assets (real estate) that allowed us to put in extra effort for extra returns (not passive, but compensated by giving higher returns).

If your primary job won't get you to FIRE as quick as you'd like, you need to find other strategies to boost yourself and decrease your time to FIRE.

We loved our jobs, otherwise we'd have gone and done something more lucrative. It was worth it to us to keep those jobs, but since we still wanted to FIRE quickly, we made up for that via other paid work and savings and investing.

It was hard work, no doubt. We didn't take summers off, like we could have as teachers. But we made it work. (In fact, we retired younger, and with more money, than the people in the article.) You can too!  :)
So what was your total income?

Gone Fishing

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Most of our progress was made while making less than $100k. We just did our best to save at least 50% of our income from day one.  FIRE at 35-40 is certainly possible for a couple with combined incomes in the $60-70k range.

Bearded Man

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This is all true, but you leave out the fact that it's hard for someone making say, 20K a year is going to have a hard time living off 3K a year while they save the rest of it (after taxes). This is easily possible if you live with your parents, take public transport, and eat your parents food. But saving enough for 25 times expenses isn't really that great in this scenario unless you plan on living with your parents for life.

Savings rate is great, but it is not as simple as you make it out to be. It's easier to save most of your money and still live a decent lifestyle when making big bucks, than it is to do it off minimum wage...

THAT is what the OP is getting at, and it is a valid point. IMO, your time to retirement will either be longer, or you will need to cut back drastically. I'm not so sure that the cut back drastically is sustainable long term. Even Jacob moved out of his RV and into a house...

I'd say OP's main concern is more about retirement age than having a borderline poverty income. He or she talked about a couple retiring in their 30s with a high income.

As OP's post indicates, that's not feasible on a middle class income. But as other posters have shown, if you keep your expenses low enough, you can set yourself up to retire at 45-50...and that's 15-20 years ahead of 80% of the population.

I am living proof that's not true.

My first year out of college, I started at 32k as a teacher. My wife, as a part time substitute, made maybe 18k (then got a job as a full time teacher the next year).

Our final pay was 44k/yr. each. That was after working 8 years, and getting Master's degrees. Our salary cost of living increases were frozen for several years due to the recession, so most of that increase was the boost from the extra education.

Nearly a decade of experience, plus Master's degrees, and we still didn't hit even 90k combined, let alone 100k.

But we hit the 7-figure mark, and FIRE'd by 30.

Lots of extra income from side-gigs and other paid optional work, combined with a high savings rate, and investment into assets (real estate) that allowed us to put in extra effort for extra returns (not passive, but compensated by giving higher returns).

If your primary job won't get you to FIRE as quick as you'd like, you need to find other strategies to boost yourself and decrease your time to FIRE.

We loved our jobs, otherwise we'd have gone and done something more lucrative. It was worth it to us to keep those jobs, but since we still wanted to FIRE quickly, we made up for that via other paid work and savings and investing.

It was hard work, no doubt. We didn't take summers off, like we could have as teachers. But we made it work. (In fact, we retired younger, and with more money, than the people in the article.) You can too!  :)

That is pretty well done. I skimmed your journal and I am still amazed that you were able to do it. Obviously rental properties help you FIRE faster than the stock market, and you seem to be in an IDEAL market for it (no income tax state, cheap properties with good rents, etc.).

I could see how if you saved half of your income, and bought houses for 50-70K over time, that you did it. Increasingly I see FIRE as a combination of 1) income/savings rate 2) location 3) investment vehicle.

In this case you guys had enough of a high income for the location to be able to FIRE really fast due to the combination of the investment vehicle, a favorable location for that vehicle, and a savings rate and income sufficient to allow you to do that successfully.

I'm actually debating FIRE'ing NOW just by moving to Florida. 3-4 houses, and a few hundred K in index funds. Why keep working?

Hey, aren't you supposed to be sitting on the beach drinking a fruity drink or something? :P


westcoastarlo

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Wow. A great discussion here. I'm going to have a budget party with SO tonight. Perhaps I'll even post the results of that meeting. Gulp.


APowers

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I'm not FIRE yet, but currently on my way to hitting FI at 35 having worked at a grocery store deli ($15/hr) and currently delivering pizza (about $15/hr after all expenses).

27 with wife + 2 kids. I think my max income was last year, as I was transitioning from grocery store to pizza and working both (7 days/week) ==> $39k.

Conjou

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I got started late on the idea of financial responsibility (37) and am a teacher--21 years now--making 46,700 and will partially fire by 45 (a year from now) with continuing to do seasonal work farming. My number for FI is 400,000, though, not a million. I don't have real estate or other lucrative side gigs, and I do get a little disappointed in myself when I compare myself with others on this site, but growth means learning to get over that kind of thing so now I just am very happy I discovered this site when I did and in time to at least get to financial independence by the time I will 😀

Ducky

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We make around $60,000 and are doing fine. Our goal isn't really early retirement but retiring well at 59 ( we are both 45) . If your curious there are some details in my journal. My spouse has no desire to retire earlier and wants his full pension and likes his golden handcuffs. However if we were serious about ER I would get a FT job despite my physical limitations and health. However what we are doing works for us. We have a paid for personal residence , money to finish paying for college for the kids , a paid for rental, cash and investments. You just have to get more creative with a smaller income. As soon as both kids finish college we plan to downsize quite a bit.
« Last Edit: November 30, 2015, 05:46:30 PM by Ducky »

stlbrah

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This is all true, but you leave out the fact that it's hard for someone making say, 20K a year is going to have a hard time living off 3K a year while they save the rest of it (after taxes). This is easily possible if you live with your parents, take public transport, and eat your parents food. But saving enough for 25 times expenses isn't really that great in this scenario unless you plan on living with your parents for life.

Savings rate is great, but it is not as simple as you make it out to be. It's easier to save most of your money and still live a decent lifestyle when making big bucks, than it is to do it off minimum wage...

THAT is what the OP is getting at, and it is a valid point. IMO, your time to retirement will either be longer, or you will need to cut back drastically. I'm not so sure that the cut back drastically is sustainable long term. Even Jacob moved out of his RV and into a house...

I'd say OP's main concern is more about retirement age than having a borderline poverty income. He or she talked about a couple retiring in their 30s with a high income.

As OP's post indicates, that's not feasible on a middle class income. But as other posters have shown, if you keep your expenses low enough, you can set yourself up to retire at 45-50...and that's 15-20 years ahead of 80% of the population.

I am living proof that's not true.

My first year out of college, I started at 32k as a teacher. My wife, as a part time substitute, made maybe 18k (then got a job as a full time teacher the next year).

Our final pay was 44k/yr. each. That was after working 8 years, and getting Master's degrees. Our salary cost of living increases were frozen for several years due to the recession, so most of that increase was the boost from the extra education.

Nearly a decade of experience, plus Master's degrees, and we still didn't hit even 90k combined, let alone 100k.

But we hit the 7-figure mark, and FIRE'd by 30.

Lots of extra income from side-gigs and other paid optional work, combined with a high savings rate, and investment into assets (real estate) that allowed us to put in extra effort for extra returns (not passive, but compensated by giving higher returns).

If your primary job won't get you to FIRE as quick as you'd like, you need to find other strategies to boost yourself and decrease your time to FIRE.

We loved our jobs, otherwise we'd have gone and done something more lucrative. It was worth it to us to keep those jobs, but since we still wanted to FIRE quickly, we made up for that via other paid work and savings and investing.

It was hard work, no doubt. We didn't take summers off, like we could have as teachers. But we made it work. (In fact, we retired younger, and with more money, than the people in the article.) You can too!  :)

What do you do when you fired? Sell the properties? Hire a PM?

sol

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What do you do when you fired? Sell the properties? Hire a PM?

He already has property managers.  Rebs is pretty far to the extreme side of "passive" real estate investing.  He pays people to do virtually everything.

EscapeVelocity2020

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One consistent theme among the FIRE'd is that they had increasing income over the 10 or so years they worked and kept their expenses low.  But people that make 10 years to FIRE typically hit 100k total household income on the way - but I look at it as a feature, not a bug.  If you aren't going to hit 100k, their insight is still applicable;they stopped making income whereas you are able to catch up.  For instance, if you top out at 50k, then you catch up in nominal earned income in 20 years and hopefully investments have given an overall positive real return to help accelerate closing the gap.  As long as the 4% rule is working correctly, having more time in the workforce should result in that you surpass their net-worth once you match their lifetime earnings, over a longer time-frame.  What is not discussed enough is that PF bloggers are typically bringing in a significant salary that makes the 'loss of income' a bit misleading.

But back on topic, most people experience that their salary doubles in a decade or so early in their career and expenses can stay roughly the same.  So you are asking people that made less than 50k in 2005 about their success story - and I agree that that would be interesting.  I made under 50k when I started, but that was 1996, so I don't think my story would really apply, although I also agree with others that buying very used cars and affordable real estate were key FI enablers.

arebelspy

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What do you do when you fired? Sell the properties? Hire a PM?

Yeah, manager for some, texting to deal with issues for others (which will be turned over to a PM when they go vacant).

I don't want to take over the thread answering questions about my story, so excuse me for ignoring some, but anyone can feel free to post in any of my threads, I'm a pretty open book.
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with two kids.
If you want to know more about us, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.

deborah

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When I first saw the title, I thought the OP was looking for people on low incomes, but $100k is "not high" rather than low, and I never made that sort of money. As people say, you save as much as you can, and don't increase expenses when your pay check increases. This automatically increases your savings rate. By the end, I was living on less than 25% of what I was paid.

I bought a house and paid it off as quickly as I could. Not what most people here recommend, but it really increased my savings rate, and having my own house was pivotal to where I now am. I had a boarder, and used that money to help pay off the house within five years. It was a crummy house, and badly needed a lot of work, which I gradually did myself. After a while it was one of the better houses in the street, and I sold it for a lot more than I had paid for it (which was a wrench, because I really loved that house, and it was exactly right for me by the time I finished). I make my own clothes, and grow my own vegetables and fruit, which reduces costs. I look at expenses and try to decrease them. For instance, I have gradually reduced water and electricity usage, by having water gardens and increasing the energy efficiency of my home.

Oh, and I have now been retired for six years, and could have retired a lot earlier than I did. It wasn't all clear sailing. I had a health issue that meant I was off sick every single winter for about eight weeks during my working life (this made work difficult to retain). I had a car accident, and had whiplash for three years afterward, which meant I was only working part time for that period.

HairyUpperLip

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What do you do when you fired? Sell the properties? Hire a PM?

Yeah, manager for some, texting to deal with issues for others (which will be turned over to a PM when they go vacant).

I don't want to take over the thread answering questions about my story, so excuse me for ignoring some, but anyone can feel free to post in any of my threads, I'm a pretty open book.

I didn't know you had a table of contents thread to find your threads. I'm excited to have found it and looking forward to the reading, thanks.

FLBiker

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Wife and I together are about 100K.  Before getting married, I made much less (~25K for most of my twenties, minus some years in grad school when I made nothing).  I'm 39 (she's 35) and we've got ~$450K in various index funds, mostly 403b / IRA / 457.  I probably had ~$100K when I came into this relationship 8 years ago, and she had ~$40K in student loans.  We save over 50%, but I don't know exact numbers.  To me, one of the perks of living this was is not keeping a detailed budget. :)

We live in a pretty LCOL (Tampa) and have a mortgage of ~$800 per month on a house we bought for $143K.  We have one daughter (7 mos) so our savings rate will dip w/ childcare.  Right now, my wife is SAHM (until Jan 2017) and we're just on my salary.  I recently got promoted, so I'm making $73K.  Before that, I'd been in the mid 60s for a few years.

Bearded Man

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I'm not FIRE yet, but currently on my way to hitting FI at 35 having worked at a grocery store deli ($15/hr) and currently delivering pizza (about $15/hr after all expenses).

27 with wife + 2 kids. I think my max income was last year, as I was transitioning from grocery store to pizza and working both (7 days/week) ==> $39k.

Now that's impressive, well done! I'm curious, are you in a very low cost of living area? Mind telling me where? Even via PM? If not, can you give a breakdown of cost of housing in your area, transportation, etc.

APowers

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I'm not FIRE yet, but currently on my way to hitting FI at 35 having worked at a grocery store deli ($15/hr) and currently delivering pizza (about $15/hr after all expenses).

27 with wife + 2 kids. I think my max income was last year, as I was transitioning from grocery store to pizza and working both (7 days/week) ==> $39k.
Fuller story:

We bought a fixer house ($70k mortgage @ 3%) in 2010. Got it paid off in january of this year. Original plan was to build a rental empire-- buy another house, use rent income to pay off mortgages, etc. and retire with 3-4 paid off rentals + residence. Turns out that the bank doesn't like to loan money to people who pay in cash and have no "official" debt ($70k mtg was a private/family loan)-- we had no debt, no credit cards, nothing, just trying to be responsible and only pay for things in cash as much as possible. No credit score = worse than bad credit score, apparently. Eventually we found the literal envelope system to be tedious, and decided to try switching to tracking everything through the bank, then figured we may as well run all our spending through a rewards credit card (because, hey, free money). Trying to get even a credit card turned out to be kind of a pain.

Eventually, we figured we'd have to just end up paying off the house entirely, and then try to move + get another house/mortgage once our names were attached to some credit reporting. Did a lot of repaying and remodeling over the last year and a half, and now we're here with no debt whatsoever, a house and about $20k in the bank.

I had been trying for years to get a "real job" in our city (pop 25,000) with zero success, and eventually gave up. That lack of success was pretty trying. The whole "you have to have experience in order to get experience" message, coupled with the whole "you have to have debt to get a mortgage" message is pretty depressing to a guy who would (if I say so myself) would be a stellar company asset-- bachelors degree in business, sturdy work ethic, great problem solving skills, higher-level thinking, etc-- and is the least possible risk to any lender.

Current plans are to sell our house (market value ~$120k-150k, according to comparable listings), move to Colorado Springs (big city, low COL, good climate), find a high-income job (i.e. $45k +), find a big house or duplex to buy, rent out half (either normally or Airbnb), pay it off way early, retire.

APowers

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I'm not FIRE yet, but currently on my way to hitting FI at 35 having worked at a grocery store deli ($15/hr) and currently delivering pizza (about $15/hr after all expenses).

27 with wife + 2 kids. I think my max income was last year, as I was transitioning from grocery store to pizza and working both (7 days/week) ==> $39k.

Now that's impressive, well done! I'm curious, are you in a very low cost of living area? Mind telling me where? Even via PM? If not, can you give a breakdown of cost of housing in your area, transportation, etc.

We're in NW WA. I wouldn't say our COL is super low; it's high compared to a lot of places in the midwest, but it's pretty low compared to Seattle (3hrs drive away).

Apartment rents are $600-1,000 per month.

Our property taxes are $1,300/year for an 1,100 sq. ft. house. We average about $250/mo on utilities (including phone + internet). Gasoline has been averaging $2.20-2.60/gal lately.

We're pretty frugal, and our expense budget is $1,000/month. (2 adults, 2 pre-schoolers).


arebelspy

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Hah. Kiyosaki isn't a real estate investor. He's a sale men who works to trick people into thinking he is.

He's made a lot of money, so if that's what's important to you, he's someone to listen to.  He has some good ideas, and many to discard.

But no one would confuse the two of us. :)
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with two kids.
If you want to know more about us, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.

Zikoris

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Our combined salaries are about 72K gross right now, though we do work some overtime on top of that - we're definitely nowhere near 100K though, and quite likely never will given that we're office clerks and like being office clerks.

There's nothing special we do - just keep our spending down. We spend around 26K/year. We're in our 20s with a low six figure net worth, which increases by several thousand every month from new deposits and investment returns. We figure we have about 8 or 9 years until we pull the plug on working.

robartsd

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I agree that $50k or less for a household income would be pretty hard to RE on unless you were willing to cut back lifestyle enough. At $50k in gross income, one could live similar to MMM ($24k for non-housing expenses + $12k for housing), pay $10k in income and payroll taxes (probably a high estimate), and still have $4k to save. At this savings rate, it would take about 45 years to retire without some sort of pension (6% investment return, 4% SWR); however even just $10k more cuts this by nearly 20 years.

In the past 12 months, I've earned about $57k and my wife has pulled in some side income (perhaps $10k) and we've increased our net worth by about $25k ($15k in debt reduction - we paid of the bulk of our student loans this year and now the highest interest rate we have on debt is 3%). Overall, our lifestyle spending is a bit lower than MMM's (particularly housing; <600 sq. ft. one bedroom rental house); however, we do donate significantly to our church (>10% income) and spend way more than we should on automobile transportation (15,000mi/yr, 2012 Toyota Corolla, bought on credit from CarMax in 2013).

I only came across MMM a few months ago. Spending has not changed drastically (we were already pretty frugal), but attitude towards making small improvements has changed significantly. Realizing that each dollar I want to spend per year equates to roughtly one hour of my life devoted towards earning money really changed my perspective on small savings. I'm challenging myself to use my bike more (I've always loved it when the weather is nice to hot; but prevously avoided cold and wet) and we spend even less eating out (never was a big budget and still want to do better). While we still do want to improve our housing lifestyle, we're moderating that desire and expect to partially offset the expense by growing a fairly substantial garden.

I'm glad to see this thread of people following MMM with less than 6 figure incomes.

2Birds1Stone

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We make $47k/$30k a year respectively......we have about 4 years of living expenses saved. With a 50% savings rate on track to be FI in 11-12 years at age 40/36.

Bearded Man

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I will say, that when I was making 60K a year, I was able to still save A LOT of money. I've experienced some lifestyle inflation since then. First deflation by buying a paid off house, then inflation by buying bigger and nicer ones. I think if you are in the 40-50K a year range, you can easily get ahead by deflating your lifestyle and saving 75% of that. Even in the greater Seattle area you could do it. If my GF and I only made 30K a year each after taxes, we could live on 25K a year and bank 35K per year, as long as we lived in my paid off house. The key I would say is to save and invest in things that reduce your spending first, then save and invest.


sol

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I think if you are in the 40-50K a year range, you can easily get ahead by deflating your lifestyle and saving 75% of that. Even in the greater Seattle area you could do it.

That's the key the OP needs to grasp.  Income doesn't matter, only savings rate matters, and savings rate can ALWAYS be improved. 

I made less than $12,000 per year in grad school and after five years still managed to graduate with $25k in positive net worth.  I lived with roommates.  I hardly ever drove.  I ate a lot of free university food.  No matter how poor you feel, I guarantee there is someone living on less than half of what you are who is twice as happy as you are.

catccc

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I think we are making good progress.  I earn about $88K a year, DH works very part time at a coffee shop, and stays home with the kids the rest of the time.  At $9/hr, it isn't much.  (Actually, this past summer he took seasonal full time employment, but after daycare, he brings home the same amount as working at the coffee shop part time.  So for simplicity's sake, lets just say it's part time coffee shop work for the whole year, adding few thousand to the mix.)

Our net worth is about $620K right now, and we are 36 and 38, with 2 kids, ages 4 & 7.  So it's not like we are retiring at 30, but I would say we are not as extreme as many on the board- we probably spend $250-$300 on restaurants monthly.  Our family vacation this year was about $6K. 

So it isn't like, super awesome real estate income early retirement, but we are chugging along at a pace I am proud of.  I hope to move to semi-retirement in 4-5 years, around age 40.  Some might consider DH semi-retired, but we just think of him as a stay-at-home-dad.

Feel free to check out my journal for more info, and to scoff at my recent monthly spending, which was, IMO, gross.


Cornbread OMalley

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I have fared well despite some financial mistakes over the years.  I have never been married so have funded my FI journey myself thus far.  I started out at age 23 with a salary of $22K.  Now after 16 years of service I am at a salary of $88K plus additional allowances of another $30K for housing and food.  Controlling the housing and food cost factors are a little more difficult in the military because I have to live in the area that the military assigns me to rather than in an area that I solely choose.  But the housing and food allowances offset those costs.  In my 16 years I have only resided in a few areas that are considered low cost.  If I had my choice I would choose not to live in a HCOL area.

I built my nest egg slowly through mutual fund investing and avoiding debt.


HairyUpperLip

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Hah. Kiyosaki isn't a real estate investor. He's a sale men who works to trick people into thinking he is.

He's made a lot of money, so if that's what's important to you, he's someone to listen to.  He has some good ideas, and many to discard.

But no one would confuse the two of us. :)

Not unless you write a mediocre book where I can't believe any of the child stories you tell. lol, I stopped reading his book a few chapters in. It just seemed like too much bullshit to me.

FLBiker

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No matter how poor you feel, I guarantee there is someone living on less than half of what you are who is twice as happy as you are.

Ha! Love this.

I spent a year teaching in China, living in a university provided apartment.  For the year, I think I earned like $6000, and I came home with ~$4.5K.  During that year, I also took two month long trips.  A few years later, I went back to China for work, and I'm positive I spent more money during those 10 days than during the previous year, staying at $300 hotels, eating at fancy restaurants, etc.  Not my choice, but I was part of a group.  Traveling this way (while the omelets were great) was definitely less fun.

In fairness, the way I lived / traveled in China would not have been for everyone.  I did a lot of biking and camping, and when I did pay for accommodation (in the $3-4 per night range) it was in extremely dumpy places near bus stations where I effectively had a bed in a closet with a squat toilet down the hall.  I took a 30 hour train trip during Chinese New Year without a seat reservation (let alone a bed).  Again, not for everyone.  It was pretty fun, though.  Those train rides are extremely communal, and people were very welcoming -- taking turns sitting at tables, sharing snacks, etc.

During my biking / camping, I met tons of farmers who earned in the low thousands of dollars per year (albeit they grew a lot of their own food) and were certainly not any less happy than the nouveau riche w/ black VWs tooling around the cities.  Traveling has been a great education in how little correlation there is between material abundance and happiness.

fiveoh

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My wife and I have made 70-90k combined the last 5 years.(when we really started saving).  It would/will take us about another 10 to reach FI at the same income/savings rate(60% I would guess).  So about 15 years total. 

Dicey

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I squeaked over the 100k mark just once in my career ($105k, IIRC). My average income was about $50-$55k. I'm FIRE now because I invested in real estate, had roommates, and lived frugally despite being in a Hi-COLA my whole career. I retired early because I knew I wanted to from the moment I started working. Even though there were things I enjoyed during my career, I always wanted OUT. I made sure to enjoy life along the way, including lots of travel, but I never lost sight of the goal. If I can do it, I truly believe that anybody can. You just have to want it as much as I did.

TravelJunkyQC

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I was lucky to get out of university debt free, and 15k USD extra that my grand-father left me when he passed. I have only made 40k CAD a year for the past two years (now up to 46k CAD) - before that, I was making between 12k CAD and 28k CAD a year. I've increased my cost of living only slightly from when I made an average of 18k a year, meaning that I can put away approximately half of my 35k take-home every year. 29 years old and I have a NW of about 75k CAD. So yes, it's possible. It isn't much in terms of networth, but considering my salary (and the fact that I take international vacations, eat meat, spend on camping and climbing and things I love), I think I live a pretty sweet life on a smaller salary than many here.

SenoritaStache

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I'm kind of on arebelspy's boat.  I my self have not made more that 35k per year, in all my 8 yrs of working.  My DH has not made more than 45k per year, in his 12 yr working history.  However, our networth at the moment is around 800k.  I'm happy with this amount but DH want to hit 1M, so we will see.)
« Last Edit: December 03, 2015, 10:40:02 AM by SenoritaStache »

cawiau

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As the popular saying goes: it is not how much you make, it is how much you save!


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