STATS35 years old, software developer employed full-time, lives in Brooklyn NYC with my girlfriend who owns her home. If things keep going well, I would love to get married sometime in the next 2 years. No kids and no plans to have kids.
INCOMESalary from full-time job until 7/31/2014: 97,000 + 3,000 bonus = 100,000 total
Freelance income: A very small amount -- so far this year I have collected only 1,282.
Salary from full-time job after 8/4/2014:
110,000 base
"Profit sharing bonus" at end of June and end of December each year averaging 16% of previous 6 months' salary, so projected bonus total for an average year is about 17,600.
127,600 total (
EDIT: typo/miscalculation)
Projected freelance income: I have a bigger project that will probably come through next month which should gross 8,000. I will be phasing freelance work out as I start my new job (I want to work on my own projects).
>>> Total projected annual income as of 8/4/2014: 117,600+CURRENT MONTHLY EXPENSES1311.08 Rent (1/4 of my girlfriend's mortgage)
138.87 Student loan payment
50.00 Gym (prepaid through August 2015)
As for other things: I am not sure. One of my goals in Mustachianing my life is keeping track of ALL of my expenditures for a few months so I will be able to answer this question. The last time I did this was in 2011 to calculate my emergency fund amount. At that time, the bare minimum to pay my rent and bills and eat was about 1800. My spending has crept up since then to track my increased salary. I spend a lot of money on food (cheap-to-midrange restaurants/takeout) although I do bring my homemade lunch and dinner to work at least 3-4 days out of the week. I enjoy traveling, and I went on a trip to Turkey with my girlfriend earlier this summer. It was not extravagant or anything, but it was still expensive. I also own an older dog (and co-own a puppy) so there are pet-related expenses too.
>>> Total expenses: at least 1500, probably in the neighborhood of 2500, maybe even as high as 2700, which seems so unnecessary and excessive even as I type it out right now. :|ASSETS7,990.56 Great-West 401k from current employer
1,161.25 Great-West profit-sharing from current employer (vested amount)
13,060.81 Vanguard Roth IRA
5,076.58 Vanguard 403b from old employer (account #1)
5,713.03 Vanguard 403b from old employer (account #2)
25,731.75 Vanguard 403b from old employer (account #3)
* All retirement accounts are 100% in VTIVX (Vanguard Target Retirement 2045)
7,095.67 Local bank checking
8,741.92 Capital One 360 savings
15.86 HSBC Advance (I should close this one as I haven't used it since it was called HSBC Direct)
>>> Total assets: 74,587.43LIABILITIES10,326.98 Sallie Mae student loan fixed at 2.38%
3,528.86 United MileagePlus Visa. I put as much of my spending on this as possible. I pay the statement balance every month. (
EDIT for clarity: I don't carry any balance on the card that incurs interest!)
>>> Total liabilities: 13,855.84SPECIFIC QUESTIONS (only two, because they are long-winded!)I did not fund my 401k very much while I worked at my current job from late 2011 through this month.
I had a plan to save for a down payment on a 2-family somewhere in non-prime but kinda-safe outer-borough NYC. I had an epiphany this weekend after reading the biggerpockets.com forums for a day straight, and then going back to the MMM forums for another day. I realized this idea is not very smart. It doesn't seem like a realistic option given the sheer amount of downpayment that is required to make it cash flow. Plus there are the delays, hassles, and expense of buying or selling, AND the influx of all-cash buyers in the city right now. I also read some pretty convincing threads on the MMM forums, e.g.
http://forum.mrmoneymustache.com/real-estate-and-landlording/investment-property-sell-at-a-loss-wwyd/http://forum.mrmoneymustache.com/real-estate-and-landlording/keep-or-sell-nyc-apartment/http://forum.mrmoneymustache.com/real-estate-and-landlording/case-study-rent-or-sell-in-manhattan/I also considered buying single-family 2BR rowhomes in my old neighborhood of University City Philadelphia. I lived there for 14 years and know it well. They are much cheaper and I would have a better chance of making money in the average month. But even then I realized I want to work hard at my new job and enjoy my day-to-day life in NYC. I don't want to be saddled with the hassle of Victorian-era rentals 2 hours south. Plus ongoing expenses. I don't even own a car.
I came to the conclusion that my spare time should be invested in improving my job-related skills, since this time investment is most likely to make me money. (I also enjoy it!) My downpayment-saving plan was a failure anyway, as you can see from my cash assets. I decided that it may suit me much better to take the hands-off approach and put ALL of my non-EF cash into retirement and taxable mutual funds.
ACTUAL QUESTION 1: Am I stupid for giving up on the landlording idea in lieu of investing?
ACTUAL QUESTION 2: My new job doesn't allow any 401k participation until 1 year of employment. After that they will match 4%, and they are partnered with Vanguard. So that is great. But until then, what should I do?
I think my income will be too high to continue contributing to the Roth IRA I already have. Am I wrong about this?
Should I open a traditional IRA at Vanguard and roll all of my old 403b accounts and my current employer's 401k into it?
Which fund? Should I stick with VTIVX even though I may be trying for FI much earlier than 2045? Should I just go all in to VTSAX (Total Stock Market Index Admiral Shares with its 0.05% expense ratio)?
THEN, since I can only contribute 5,500 aside from the rollover amount to an IRA, what should I do with the remainder of my excess income in 2014?
Thanks a lot, and let me know if I can provide any more info.