Gross Salary/Wages: $188K
Net take home pay: $110K
Current monthly expenses:
P&I $1,900 $0...once paid off
T&I, MIP $600
Life Ins $120 $0 - you have sufficient assets not to need this
Cell $150 $40
Gas, car maintenance $200
Car Insurance $150 $80
Utilities $150
Alarm $50 (leaving this alone for now)
Water Filtration: $65 $20
Cable, Internet, Netflix $165 $75 - Netflix & Internet only
Groceries: $300
Restaurant: $400
Travel: $200
Charity: $150
Gift: $150
Gym: $30
Clothing, grooming $100
Home Misc: $120
Total: $5,000 x 12 = ($60K)/year
$2665 x 12 = $31,980. We'll bump this up to $35k/year for added safety.
Other savings: IRA ($11K)
Save to spend: ($12K) (note: I'm not sure what this means, but this now comes from bonuses)
Net: $27K we also have bonuses but they are hard to count on
Expected ER expenses: fairly similarly ($35K) or less
Assets:
Primary $524K
Rental $351100
401k, Ira’s $142K
Other Savings: $20K
Liabilities:
Primary Home Mortgage: $397K, 4%, $2,500 monthly
Rental Mortgage: $197K, 4%, $1,520 monthly
SL1 $10K, 6%, $200 monthly. We’re paying down $1K\month with a goal to $0 by end of year
SL2 $44K, 6%, $400 monthly. Will pay down once SL 1 is paid in full. Target payment end of 2018
This is just a thought exercise, and what I'd call "hypothetical scenario #3". This is merely designed to simplify your NW and calculate when you could hit your FI number.
It's likely not even the 'best' course of action, and involves only modest 'fat-trimming' from your budget.
Steps:1) Sell the rental put the money to immediately eliminate both SL (-$55k). Remaining $100k goes towards primary mortgage
2) Continue maxing out both 401(k)s and IRAs each year - $47,000 / year
3) Pay off primary mortgage ASAP. Note: I'm not normally in this camp, but remember, this is just a thought exercise.
4) Once the mortgage is gone, put all excess $ into taxable accounts.
Assumptions:1) Real (adjusted) returns of 5%/year. Simplistic yes, and a bit conservative historically.
2) You shift your budget as reflected above, trimming some of the fat.
3) Bonuses are not factored in. That's $27k which may or may not be available to you
4) once your mortgage is gone you can live on $35/year. Remember, you're not paying $1,900 in P+I ($22,800/yr)
5) no raises or job losses.
Year 1: 401k/IRA: $247,800. Taxable: $21,000. Mortgage: $253,880
Year 2: 401k/IRA: $309,540. Taxable: $22,050. Mortgage: $209,035
Year 3: 401k/IRA: $374,365. Taxable: $23,152. Mortgage: $162,397
...
Year 5: 401k/IRA: $513,907. Taxable: $25,525. Mortgage: $63,448
...
Year 7: 401k/IRA: $667,750. Taxable: $72,156. Mortgage: $0 Note: Mortgage paid off in 2nd month of year 6. P+I applied towards investments now.
Year 8: 401k/IRA: $750,487. Taxable: $150,764. Note: here you would have a WR of 3.8% to cover all expenses ($35,000/yr)
...Year 10: 401k/IRA: $928,580. Taxable: $319,967.
4% WR = $50k/yr...
Year 12: 401k/IRA: $1,124,927. Taxable: $506,514 4%
WR = $65k/yr