Author Topic: Case Study: workin for the man  (Read 9486 times)

makinbutter

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Case Study: workin for the man
« on: August 16, 2014, 08:55:47 AM »
Hello, kind forum readers.  I mustache you a question... harrr harr.

Long-time reader, first time poster, etc. etc.  I work for the gubmint and want to check to see when I can "quit this biatch."  At the very least, I'm going to bail on public service at some point in the foreseeable future.  Sitting at a cube all day makes me want to gouge my eyes out.  I do IT work and it bloooows.  I also would like to kindly request face punches where needed.

Life Status: 33, single, no kids
Income: 90k-ish range

Current expenses: roughly in the 30-40k range (further breakdown below)
Expected ER expenses: 25-40k yearly?  This is a huge WAG for me - I could likely get this down a lot and frankly at this point have no idea how much I would need.

Assets:
TSP: 135k
Roth: 30k
Checking account: 8k
Condo: 265-270k

Liabilities:
Mortgage: 250k

I'm showing a NW somewhere in the 180-190k range, depending on the vicissitudes of the market, how much the condo would sell for, etc.  I don't currently have a side hustle, but I aim to save up over the next few years and get into the rental bidnazz.  Hopefully.  Other pertinent details: I have only been making my current salary for a handful of years and paid out quite a large sum - let's say... 40k or so - to my ex when we split, so that certainly hurt the financial bottom line.  I drive a 10+ year old Japanese econo-box and don't count the car's value in my NW, since I intend to ride that thing until the value asymptotically approaches 0...

Here's a pretty detailed breakdown of the budget - these are the "fixed" expenses, and there tend to be other variable expenses in there.

Mortgage (HOA, PITI, etc., all-in): 1800 [roughly 300+ of which is going to principal, so it's not really a 'cost' per se - I should also get an amount that would equal somewhere around 200-300 back come tax-time, so the real 'cost' of the mortgage is probably 1200-1300]
Car insurance: 50
Gas for car: 110
Internet: 50
Cell phone: 30
Utilities on condo: avg 40
Groceries: 350
Restaurants: 200
Alcohol/entertainment: 100
Church/other charitable giving: 100
Laundry (dry cleaning etc): 20
Total: 2850.  Let's say 2900.

Variable expenses: gifts, travel, work clothes, etc.  I don't like budgeting for these each month - that seems highly imprecise to me - so I just throw dough at them when needed.  Last year, I spent like 4k on international travel/friends' weddings/gifts for family/friends, and I would do that in a heartbeat again this coming year.  I believe in spending your coin in alignment with values, and that certainly aligns with my values.

I have a few specific questions. 

1) ideas on how to trim this budget?  Face-punches needed?  I do great on specific expenses like car, cell-phone, etc., which I don't frankly care about, but then I will admit I'm a profligate spender when it comes to things like eating.  I buy into the whole organic, grass-fed thing, and I'm not going to change that.  In fact, I'm willing to work whatever extra amt of years is needed to insure that for the rest of my days on this planet, I'm buying my food from farmer's markets, cow-shares with friends, CSAs, etc.  That's another 'value' of mine in the way that expensive tech/electronics/car is absolutely not.  I do - whenever possible - try to trim this number down, say from buying from a cow-share where the average price for grass-fed cow drops to like $5 a lb, but I accept that it will be a higher number than it might be for some friends.

Also, as an aside, I realize I do have a fairly high restaurant/alcohol/entertainment budget but that is an artifact of being recently back on the market, so to speak.  I expect that number to taper down in time, but am making up for years of a gnarly situation by enjoying myself now.

2) Is retired-age-makinbutter already set? Someone help me understand the pension system - my HR people are a Grade-A clusterfuck.  My understanding is you get something like 1% of your top-three-avg-year-salary for every year you've worked.  Let's say, conservatively, that I bail from the govt after two or three more years and have 10 years in at that point, and that for ease of numbers, my top three years' salary avg is 100k (it's not, but this is back-of-the-envelope-stuff here).

Avg top three - 100k
1% x 10 yrs x 100k = 10k a year.  Granted, I can't collect this until I'm 60 or something, so in the intervening 25 years inflation (at 2.5% a year) will equal 1.025 ^ 25, orrrrr somewhere around doubling the cost of everything, or halving my 10k/year pension down to a real amount of - let's say - 5k.  Thus, I have 5k coming in yearly from the pension.

Retirement accounts' current value 165.  Assuming a conservative 5% real return, that means that in 27 years (age 60), the value will be 165 x (1.05^27), or 615k, which assuming a 4% SWR should throw off 25k/yr.  This is without putting another dollar in ever, which is unlikely (I will obviously continue to contribute until I finally pull the plug).

This gives a retirement income - at age 60 - of at least 30k/yr.  This is without dropping another dollar in.

Is retired-age-MB set? 

3) If retired-age-MB is set, how realistic is it for current-age-makinbutter to take some steps to lower that "sweet, I'm set" age from 60 down to, say, 40?  45?  I've only been doing this mustache thing for not very long and have made some huuuuge improvements already (suck it, big-cellphone-provider, I won't pay your shitty outrageous iphone fees anymore!).  I also would like to get married/have kids some day, so I realize that expenses and priorities will change, but I want to plan now to make/save as much coin as possible so that I could, say, get out of the IT grind and do something entirely different that maybe didn't pay as much money but was more soul-enriching (hello, HS teaching! etc etc). 

4) Other ideas? I appreciate face punches and pats on the back alike.  It's been a shitshow the past few years but I'm looking forward to getting my house in order going fwd.  Ideally, I'd want to get out of this grind and do something far less remunerative either part-time or full-time (if it was a sweet job) NOT for the sake of stacking bucks, because young-makinbutter already took care of that for future-MB.  I welcome your thoughts.

ender

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Re: Case Study: workin for the man
« Reply #1 on: August 16, 2014, 09:21:20 AM »
Your title made me think of this article - http://www.bravenewlife.com/06/the-man-is-you/


Also you spend $550 on food for a single person? My two roommates and I spend less than $300 for all three of us (and several SO's frequently) per month total.

If you are hoping to find dates there are plenty of alternative methods than eating out continuously.

makinbutter

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Re: Case Study: workin for the man
« Reply #2 on: August 16, 2014, 09:31:59 AM »
Ender - thanks for the response, bud. 

Let me get some clarification - you spend less than $100 per person per month? Is this an exaggeration or an earnest reflection of your spending?

That's $3.33 a day on food (not counting toothpaste, deodorant, etc. - 'other' grocery purchases).  What do you eat at every meal?  For personal reasons, I choose to eat all free-range animals, freshly-caught fish, etc., so my per-unit cost is likely to be considerably higher than yours.  I am 'ok' with that and as I'd mentioned above, willing to work the extra year or two or whatever to keep myself eating that way.

I could certainly tighten up that 350 (which, btw, includes shampoo, deodorant, etc) down to, say, 300, but ultimately that saves what - 600 a year?  I work even one extra month and that will already give me YEARS' worth of profligate spending on free-range cow, pastured chicken eggs, fresh-caught fish, etc.

theonethatgotaway

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Re: Case Study: workin for the man
« Reply #3 on: August 16, 2014, 10:18:51 AM »
I don't have anything to add other than I really enjoyed your writing!

CALL 911

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Re: Case Study: workin for the man
« Reply #4 on: August 16, 2014, 11:08:49 AM »
You circuitously asked us, your fellow mustachians for "the answer". You can clearly do math. You've identified your spending. There is little for us to offer, like "sell the 14th car" or "ditch the 5th timeshare".

But I can offer this. You are your own worst enemy. You may not believe me, but let me show you.

"but am making up for years of a gnarly situation by enjoying myself now."

Here is your real impediment to retiring in 3 years. You also want to do real estate someday. And you don't have a side hustle, because, well, it sounds inconvenient. You eat vegan free range lion fish flown in daily from Madagascar with authentic fair trade vanilla beans and Crystal.

Do you want to retire in 5 years, or do you deserve to live the good life, because your ex was mean, it's too hot and the sun was in my eyes?

Only you can answer it. If you want to retire, quit with the excuses and re-read the MMM blog. Then take a red pen to your budget and rethink every category. If you want to enjoy the good life, order another free range tofu.
« Last Edit: August 16, 2014, 11:19:45 AM by CALL 911 »

Chrissy

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Re: Case Study: workin for the man
« Reply #5 on: August 16, 2014, 11:10:23 AM »
I have a feeling you could retire much sooner than 60, but it's hard to tell without additional information.

What's the interest on your mortgage?

I'm unclear about your TSP.  Work contributes 10k/yr... and how much do you contribute per year?

Seņora Savings

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Re: Case Study: workin for the man
« Reply #6 on: August 16, 2014, 11:37:41 AM »
Re 1) If you want to get grocery spending down, go from free range cows, etc. to vegetarian or vegan.  Even eating the highest quality of everything will take you to $150 (twice what I spend), and it should meld with whatever values are pushing free range.  That (with restaurants) would cut $400 a month out of your spending, and that's still leaving the $100 for alcohol.  That's $120,000 that you don't have to save up to support your life :).

2) Looks right, as long as you don't start living on 90k because you know you're set.

3)  If you're saving up a bunch of money to be a teacher, I've got some good news for you... people get paid to do that!  Very few of the teachers I've met are trust fund babies.  Also, being a teacher is a great mate magnet... people looking for money bags are repelled, people who think that living a meaningful life and spending time with kids are more valuable than cash come running. You could also look into doing tech work for a private school, since they don't have the same certification rules they'll usually be thrilled to have a data base manager who teaches a computer programming class and sponsors the robotics team.

EarlyQuit

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Case Study: workin for the man
« Reply #7 on: August 16, 2014, 12:59:16 PM »
As far as food goes, I think you can gain a lot just by dropping the restaurants and cooking at home. I can relate to your point about free range meats, etc., as I firmly believe that you are what you eat. My personal food budget is on the high side of $200-300 per month per 1 person but more than 90% of what I eat is made from scratch by me. That means almost no restaurant spending.
As far as ideas for cheaper meals, look in the Reader Recommendations section of the forum - a while back I posted a couple of links in there under the title "Mustachian Cookbooks". Sorry I don't know how to link that post here... typing this on the phone.

And last but not least, your writing style made me LOL.
« Last Edit: August 16, 2014, 02:07:48 PM by EarlyQuit »

theonethatgotaway

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Re: Case Study: workin for the man
« Reply #8 on: August 16, 2014, 01:44:44 PM »
I get the OP trying to decompress after a failed relationship. That sometimes leads to extra spending to 'get out there' a bit. IT seems like it's just a phase.

I would work on some hobbies though, more likely to meet people of similar interests.

makinbutter

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Re: Case Study: workin for the man
« Reply #9 on: August 16, 2014, 02:37:58 PM »
OP here.  Yeah, without putting too fine a point on it, you could say I am, indeed, spending a bit more than I would organically spend [organic??? Get it? Get it???? Buehler? Buehler??] due to "spreading my wings" after a failed relationship.  Was it Churchill who said "If you're going through hell... keep going"?  Anyhow, I'm out the other side and spending - perhaps - a little more than I would spend in order to enjoy myself, get out there, meet people, go out with friends, etc.  I've already noticed some spending fatigue on that end, too, and know that the number is going to crater in the next few months, to be honest.  Man doth not live by Chilean Sea-bass alone!

Thanks to all for your suggestions - and fwiw, I do love my daily free-trade Madagascarian toothfish. ;)  Can't buy THAT at the local Costco!  The restaurant budget is frankly more for meeting friends and having a social life, too - I am going from essentially no-friends to actually actively trying to meet people and have a vibrant social life, and folks in my age range tend to meet up for drinks/happy hours/dinners on the reg.  Fellow mustachians will be proud that if/when I do go, I tend to just have a single drink... it's just that I have - for the past few months - not said 'no' when I am asked to go meet folks for a drink, a dinner, etc.  I will pare that down naturally in time.  No excuses here, just a mitigating factor - and one that I am comfortable 'owning' in the meantime.

Chrissy: Actually, work only contributes a set percentage.  I max the thing out ($17.5k) and thus my contribution plus work's contribution ends up putting the total amount saved in TSP/year somewhere just north of 20k.  FWIW, I hope to retire far, far, far south of 60.  That's just the way that I conceptualize freedom - currently, I know pretty well that 60-year-old-Makinbutter is set.  Each month of savings pushes that number a liiiiiiittle closer as both time passes and the amount compounded/saved increases, until one day (hopefully soon) I will look and say "holy crap, I'm set today!"  Also, edited to add : the interest on the mortgage is in the mid 4.x% range.

CALL 911: Thanks for the encouragement, brother - I mean it.  I actually wholeheartedly agree with what you said.  I'm quite good with the maths and the plannings of things, but yes, I am, indeed, my own worst enemy.  I don't blame my ex at all for my spending, and only offered up some background as a potential mitigating factor.  As I mentioned, I'm sure that I'll taper down the enthusiasm soon and rein in the current life of wanton dissipation. :)

EarlyQuit: I appreciate it - glad you got a laugh out of the writing.  I do most of my own cooking (say, 80-90% of work lunches in tupperware is leftovers), and I don't treat the restaurants as food so much as entertainment.  I'm paying for food that is frankly - in most cases - not as good as what I could throw together but doing it willingly because that is where my friends are at?  Also, fwiw, 200 is an overestimation, and I'm actually somewhere in the 160-170 range based on the past year's worth of expenditures in Mint.

theonethatgotaway: Yep, you nailed it.  I think the high spending is just a phase - as part of Makinbutter-2.0 in the post-relationship era, I have also been exploring old passions that I let go by the wayside, which are all conveniently free/cheap hobbies.  That's been LOVELY, both on a financial side but also in a soul-enriching kinda way.  For example, I picked up playing piano again, which I haven't done in YEARS.  It's great.  My cup overfloweth.

Anyhow, thanks to you all for your ideas and even for checking in and offering support.  I sincerely appreciate the ideas/insight/suggestions.  Now let's all go get rich-uncle-pennybags up in this biatch and achieve freeeeeeeedom*

*cue Braveheart yell






« Last Edit: August 16, 2014, 02:46:02 PM by makinbutter »

ender

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Re: Case Study: workin for the man
« Reply #10 on: August 17, 2014, 06:35:56 AM »
Ender - thanks for the response, bud. 

Let me get some clarification - you spend less than $100 per person per month? Is this an exaggeration or an earnest reflection of your spending?

It's an exaggeration, I think it's normally in the $90 range, but I rounded up a bit. There are some misc expenses too which are not included since none of us add in any of our going out to eat, etc.

For specifics on my situation see this google doc of our itemized expenses from jan-jun 2013. Only real recent changes are higher fruit/vegetable costs as I have started eating more of these. This thread here has a lot of related information too.

We don't get super fancy food. Generally we buy what is on sale at grocery stores, especially for meat/fresh produce. More "staples" we stock up on - for example, bacon has been $4.50 or more for quite some time but recently was $3/pound - I've bought 4 packages of this and frozen it (limit was 2 or I would have bought more). Ditto to ragu pasta sauce, was on sale for $0.99/jar recently and it's normally at best $1.50/jar.

Fresh produce generally has something on sale. Bananas/apples can always be had at good deals. Other stuff can be somewhat seasonal but still easy to find reasonable deals in winter.

For bread many grocery stores have "discount" bread which can be easily frozen and not go bad. Or you can make your own bread.

Quote
That's $3.33 a day on food (not counting toothpaste, deodorant, etc. - 'other' grocery purchases).  What do you eat at every meal?  For personal reasons, I choose to eat all free-range animals, freshly-caught fish, etc., so my per-unit cost is likely to be considerably higher than yours.  I am 'ok' with that and as I'd mentioned above, willing to work the extra year or two or whatever to keep myself eating that way.

I could certainly tighten up that 350 (which, btw, includes shampoo, deodorant, etc) down to, say, 300, but ultimately that saves what - 600 a year?  I work even one extra month and that will already give me YEARS' worth of profligate spending on free-range cow, pastured chicken eggs, fresh-caught fish, etc.

A way to think of things is that each $100 you spend per month is about a $30,000 amount you need to save (4% withdrawal from $30k is $1,200/year so $100/month).

So if you want to spend $350/month extra on a "food premium" this is fine, but it means you will need to have about $100,000 more in savings/investments to support this lifestyle indefinitely. This is more meaningful when you include eating out at $250/month.


But there are plenty of people here too who eat very healthy, organic food and spend considerably less than $550/month on food per person.

makinbutter

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Re: Case Study: workin for the man
« Reply #11 on: August 17, 2014, 08:52:09 AM »
Enderland: Ho-lee sheet.  You do, indeed, spend under $100 a month per person on food!!  Well done, brother.  I'm genuinely impressed. 

I appreciate the face punch about the cost (in terms of hundreds of thousands of bucks!) required to support eating expensively (or, well, doing anything expensively).  It certainly helps put it in perspective when you put it that way.  I think there are certainly some "easy wins" that I can accomplish more of (maybe getting a cow-share for my meat for the entire year, which would knock off something like $50 a month off the average price), eating less meat/fish, eating less in general...

It's tough - complainypants time.  I'm an avid weekend warrior recreational athlete and eat a lot to support that.  I certainly can pare down the expenses/eat less/stop bitching.  I'll punch my own face right now and see if it's worth it to me to hold the nose to the grindstone for longer just to keep myself in free-range chicken eggs for the rest of my days. :)

Thanks again for the advice and support, y'all.  You are great.

Moonwaves

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Re: Case Study: workin for the man
« Reply #12 on: August 17, 2014, 10:38:26 AM »
At the very least, I'm going to bail on public service at some point in the foreseeable future.  Sitting at a cube all day makes me want to gouge my eyes out. 
You are young and innocent so I'll say it just in case no-one else thinks to. Cubes are not restricted to public service jobs. :)

Full Beard

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Re: Case Study: workin for the man
« Reply #13 on: August 17, 2014, 05:30:44 PM »
Makinbutter, you're doing a great job so far!!  Are you a male or female?  Where are you located?

daverobev

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Re: Case Study: workin for the man
« Reply #14 on: August 17, 2014, 05:51:41 PM »
Or you can make your own bread.

Speaking of which... mmmm, just about ready to come out of the oven!

@OP: $90k is a lot of cash. I used to eat mostly organic, and was a veggie for a long time. The cow share stuff is cool and I don't want to discourage it, but beef is the worst, from an environmental standpoint (perhaps not grass fed, though...). If you can cut down to 1 or 2 meat meals a week, buy what's on sale, etc I'm sure you can trim the budget to $200 no problem.

You're doing well. Just got to 'pay yourself first' by depositing significant chunks of cash every pay day into a brokerage account...

RyeWhiskey

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Re: Case Study: workin for the man
« Reply #15 on: August 17, 2014, 06:32:00 PM »
Here's a pretty detailed breakdown of the budget - these are the "fixed" expenses, and there tend to be other variable expenses in there.

Mortgage (HOA, PITI, etc., all-in): 1800 [roughly 300+ of which is going to principal, so it's not really a 'cost' per se - I should also get an amount that would equal somewhere around 200-300 back come tax-time, so the real 'cost' of the mortgage is probably 1200-1300]
Car insurance: 50
Gas for car: 110
Internet: 50
Cell phone: 30
Utilities on condo: avg 40
Groceries: 350
Restaurants: 200
Alcohol/entertainment: 100
Church/other charitable giving: 100
Laundry (dry cleaning etc): 20
Total: 2850.  Let's say 2900.

Variable expenses: gifts, travel, work clothes, etc.  I don't like budgeting for these each month - that seems highly imprecise to me - so I just throw dough at them when needed.  Last year, I spent like 4k on international travel/friends' weddings/gifts for family/friends, and I would do that in a heartbeat again this coming year.  I believe in spending your coin in alignment with values, and that certainly aligns with my values.

I have a few specific questions. 

1) ideas on how to trim this budget?  Face-punches needed?  I do great on specific expenses like car, cell-phone, etc., which I don't frankly care about, but then I will admit I'm a profligate spender when it comes to things like eating.  I buy into the whole organic, grass-fed thing, and I'm not going to change that.  In fact, I'm willing to work whatever extra amt of years is needed to insure that for the rest of my days on this planet, I'm buying my food from farmer's markets, cow-shares with friends, CSAs, etc.  That's another 'value' of mine in the way that expensive tech/electronics/car is absolutely not.  I do - whenever possible - try to trim this number down, say from buying from a cow-share where the average price for grass-fed cow drops to like $5 a lb, but I accept that it will be a higher number than it might be for some friends.

Punch in face:

Church/other charitable giving: 100 ; make this 0.
Restaurants: 200 ; make this closer to 0.
Car insurance: 50 + Gas for car: 110 ; bike to work, make this 0.
Alcohol/entertainment: 100 ; Cut this in half.

Seriously, I respect the organic, local meat, CSA, deal, so I'm not going to harp on you for that. But charitable giving? That's $1,200/year. Restaurants? $2,400/year. Car related expenses (not counting oil changes, tires, etc...)? $1,920. Those expenses combined, that's $5,520 a year, i.e. a Roth IRA contribution. Think about it.
As for the booze, sure, look at my username. But you can probably cut that in half. Box wine, buying liquor in bulk at a discount, learning which mid-range booze tastes like top-flight booze, etc...

Also, as an aside, I realize I do have a fairly high restaurant/alcohol/entertainment budget but that is an artifact of being recently back on the market, so to speak.  I expect that number to taper down in time, but am making up for years of a gnarly situation by enjoying myself now.

Whatever. If you're serious about your finances then the lady/dude you meet will have to share your feelings, no? So why bother putting on a facade? Dive bars and free shows it is!

2) Is retired-age-makinbutter already set?

[words]

Is retired-age-MB set? 

I wouldn't think of it this way. I'd try and save as much as I can with relative comfort while pursuing the things I want to do until it seems as though I don't need to do that anymore (i.e. retirement?). Doing the math you did is dependent upon so many variables, if one isn't just what you thought, how does that affect your future?

3) If retired-age-MB is set, how realistic is it for current-age-makinbutter to take some steps to lower that "sweet, I'm set" age from 60 down to, say, 40?  45?  I've only been doing this mustache thing for not very long and have made some huuuuge improvements already (suck it, big-cellphone-provider, I won't pay your shitty outrageous iphone fees anymore!).  I also would like to get married/have kids some day, so I realize that expenses and priorities will change, but I want to plan now to make/save as much coin as possible so that I could, say, get out of the IT grind and do something entirely different that maybe didn't pay as much money but was more soul-enriching (hello, HS teaching! etc etc). 

Generally speaking, teaching pays shit, but it can be very rewarding. I suggest you do what you love, save what you can, and deal with the rest later. Don't overthink it all - keep things simple.

makinbutter

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Re: Case Study: workin for the man
« Reply #16 on: August 17, 2014, 07:54:11 PM »
Punch in face:

Church/other charitable giving: 100 ; make this 0.
Restaurants: 200 ; make this closer to 0.
Car insurance: 50 + Gas for car: 110 ; bike to work, make this 0.
Alcohol/entertainment: 100 ; Cut this in half.

Seriously, I respect the organic, local meat, CSA, deal, so I'm not going to harp on you for that. But charitable giving? That's $1,200/year. Restaurants? $2,400/year. Car related expenses (not counting oil changes, tires, etc...)? $1,920. Those expenses combined, that's $5,520 a year, i.e. a Roth IRA contribution. Think about it.
As for the booze, sure, look at my username. But you can probably cut that in half. Box wine, buying liquor in bulk at a discount, learning which mid-range booze tastes like top-flight booze, etc...

[snip snip]

Generally speaking, teaching pays shit, but it can be very rewarding. I suggest you do what you love, save what you can, and deal with the rest later. Don't overthink it all - keep things simple.

RW:  Hey bro - thanks for the thoughts.  I'll throw it out there up front that there is a 0% chance that I will cease charitable contributions and church gifting.  I appreciate that doing so would save me 1k per year, but this is important to me and I'm very willing to work extra to make it happen.  FWIW, I also volunteer a considerable amount with my church, so it's not all about just writing a check - I like to do both. 

I appreciate the restaurant-facepunch, though.  I do eat out too much (not for food - for entertainment, as I'd elaborated above) and will make efforts going forward to put a lock on that.  Same with the alcohol.  I don't even enjoy the taste of alcohol - I treat it solely as a way to meet up with friends, etc.  I could easily trim down that 3.6k per year on restaurants and alcohol into a more moderate 1.5k or something with almost no effort, and in fact, I will endeavor to do so.

As for the car - I've tried (not hard enough!) to go carless.  I'm originally from the Pacific Northwest but relocated to Northern Virginia (NoVa, holler!) and my concession to mustachianism on the car front is driving a beater.  Drive it like I stole it!  In fact, I hope someone steals it. It's seen better days...

Full Beard: hey bro, I'm in NoVa too.  Originally from Seattle burbs and loving the mild, temperate summers down here!  (that's sarcasm - this area's weather sucks bawlz).

DaveRobev: thanks, DR - honestly, even hearing from other people has been great in terms of reevaluating priorities, and I think that I will implement some of the 'easy wins' here and see if I can't chop out a few hundo a month with little impact on life.  That's THOUSANDS of bucks back per year.  Hoorayyyyyy, freedom!

makinbutter

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Re: Case Study: workin for the man
« Reply #17 on: September 23, 2016, 07:57:14 AM »
Since *I* always appreciate when people come back to their old posts and update stuff, I decided I'd Lazarus the fuck out of my old asking-for-advice thread.  After two years of only-moderate belt-tightening, and with many thanks to the Mustachian hoitpoloit, here's where I'm sitting.

Assets:

Cash: 70k
TSP: 162k
Roth: 42k
Lending Club: 4k
Condo: 265k
Investment property: 120k

Debts:
Condo mortgage: 241k
Investment property mortgage: 78k

drum roll...

Net worth: 345k +/-

This means that in two years since posting here, my NW has exploded up like 150k (thanks, mustachian warriors!) by spending a metric fuck-ton less.  The investment property (cash-in around 45-50k or so?) kicks off like 350-400 a month, or roughly 4-5k a year, plus principal paydown, so the cash-on-cash return is somewhere around 9%.  Back of envelope hand-wavy math FTW!

The cash is a result of recently selling off a large portion of stocks in order to make another RE purchase.  I love me some stocks, but I also more love me some uncallable leverage, so...

All-in-all, life's looking much better than two years ago.  I've tightened spending, net worth has almost doubled, and I owe you guys for the face punches and support alike.  I'm also looking heavily @ moving out of WDC and back to Chicago, where I have a lot of family, so spending should go down even further.  Woot fucking woot.  I got 99 problems, but early retirement (shouldn't be) one.

makinbutter

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Case Study: workin for the man (update to old thread)
« Reply #18 on: January 18, 2018, 03:52:54 PM »
Yo, guys.   Psst. This mustache shit works.  Who knew?

Coming back to update an old thread after taking the advice of many a mustachian here.  I'm inching closer and closer to freeeeeedommmmmm.  I managed to get some more real estate - a side hustle I LOVE - and I'm slowly starting a miniature empire.  The passive(ish) income from my RE already covers something like 1/3 or 1/2 of my barebones freedom number ('leanfire' I think is what the kids are calling it).

Starting NW in August 2014: 180-190k
Midpoint check-in in September 2016: 345k
Current NW in January 2018: 480k (ish), depending on RE valuation

Assets: 1030k

Cash: 8k
TSP: 250k
Roth: 57k
Condo: 275k
Investment property (1): 120k:
Investment property (2): 130k
Investment property (3): 200k

Debts: (550k)
Condo mortgage: 235k
Investment property mortgage (1): 76k
Investment property mortgage (2): 96k
Investment property mortgage (3): 143k

drum roll...

Net worth: 470-490k +/- depending on RE valuation (of course, the transaction costs of actually selling any of it would drive this number far lower)

How did I get here from there?  THIS ONE WEIRD TRICK, BANKERS HATE ME...!  Actually, no, it was boring af.  I merely kept spending only-slightly-absurd, banked bonuses/tax refunds/all monies received from RE side hustle, and progressed upwards in career a bit.  I'm still making FARRRR less $$$ than any of my high school friends, say, who are all consultants in the 150k+ and up range, but hey, this is 'enough' for me for now.

I figure I'll need bare minimum 2k a month to retire, or 4k a month to live the great life.  That means in all likelihood I could probably pull the plug in like 2-3 more years (I will probably have some job that earns 10k a year in 'retirement', knowing myself).  This will give me a lavish buffer against uncertainty and not worry about belt tightening... ever.

Fuck yeah.  I don't share this shit with hardly anyone IRL but I will probably be over a cool half a milly in the next few months, and then... 3/4 milly within a few years.  I can't overstate the sense of peace this brings. 

Chrissy

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Re: Case Study: workin for the man
« Reply #19 on: January 18, 2018, 07:06:28 PM »
Woot-woot!  You're killing it!  Thanks for keeping us posted, and continue to do so.

CALL 911

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Re: Case Study: workin for the man
« Reply #20 on: June 08, 2018, 01:07:13 PM »
Yay you!

The side hustle wasn't so inconvenient after all!

ender

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Re: Case Study: workin for the man
« Reply #21 on: June 10, 2018, 06:38:42 AM »
Fun to see the update!

marty998

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Re: Case Study: workin for the man
« Reply #22 on: June 27, 2018, 02:57:58 AM »
Oh... I had this longwinded reply all typed up referencing a post from 4 years ago. Oops.

Nice to see the progress regardless. Well done.

makinbutter

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Re: Case Study: workin for the man
« Reply #23 on: July 07, 2018, 03:32:52 PM »
I feel like some dude running a marathon with a cheering section - you guys rock!  Special mentions for Chrissy, Ender, Call 911, and Marty, for checking in recently and staying with me during this whole journey.  Holy.  Shit.  Almost.  Done.

This isn't a yearly update, but I appreciate reading everyone else's numbers like a creepy financial voyeur, so here's a roughly-six-month look into someone else's race to freedom.   

First the overall picture for the hoitpoloit, then I'll get into explain mode.

Starting NW in August 2014: 180-190k
September 2016: 345k
January 2018: 480k (ish)
July 2018: 490k (ish)

Total Assets: 1650k

Investments: 195k
Cash: 10k
TSP: 260k
Roth: 25k

Real estate: 1355k
New primary residence: 620k
Condo: 285k
Investment property (1): 120k:
Investment property (2): 130k
Investment property (3): 200k


Total Debts: (1150k)


Mortgages: 1150k
New primary residence: 604k
Condo mortgage: 234k
Investment property mortgage (1): 75k
Investment property mortgage (2): 95k
Investment property mortgage (3): 142k


drum roll...

Net worth: 490k ish +/- depending on RE valuation (of course, the transaction costs of actually selling any of it would drive this number far lower)

So... in six months, despite working like a beast and saving at a prodigious clip, net worth actually stayed mostly flat... what gives??  I'll confess, that actually caused me a little anxiety to see, but here are some mitigating factors.

-- international markets and emerging markets are actually down since January, dragging down the value of the Roth IRA and TSP by quite a bit
-- I cashed out 30k out of the Roth to throw into a new primary residence ("house hacking"); transaction costs on the loan that large (PMI up front, closing costs etc.) take a huge one-time chunk out of the NW.  The area is turning around quickly, though, so I'm confident the purchase will end up being a great financial decision in the next 5-10 years.
-- put approximately 15k into renovating condo and one of the investment properties but in order to keep the #s as conservative as possible, I didn't reflect all of this in the prospective sale value of the property (so some of that $ just went *poof* off the value sheet).  I'm probably going to sell this condo at some point soon, as it's not a particularly good investment AT ALL (rents at $1650...  .5% rule, babyyyy)

At any rate, I feel like a dude sprinting towards the finish - I fully expect within the next 2-3 years to be completely done with work except purely for fun.  Keeping the rest of this pretty back-of-the-envelope, but here goes.

Current NW: almost 500k
Current salary: approximately 105k
Savings: approximately 30-40k/year (this includes TSP match)

Between the 30-40 that I'll stack away over the next 3 years (call it 100k), the income from the existing rental portfolio (call that 50k over the next 3 years), and principal paydown, growth in TSP/Roth, dividends earned... I'm looking into the crystal ball and hopeful for seeing approximately 700-800k NW in the near future.  At that point, I'll either OMY myself up to a cool millie or I'll pull the plug from full-time work (by 40th bday holy sheeeeet) or go massively part-time at somethign entirely unrelated.

In case anyone else is planning on going a slightly-unconventional-for-the-MMM-forums route to FIRE, I'll be purchasing extra real estate with the 100-150k that I stack up over the next few years, which should take me into FIRE territory based purely on rental income. 

I have friends who are stressing about trade wars with China, or Trump's tweets destroying their investment portfolio, and I have solidly managed to IDGAF myself onto the cusp of financial independence in my 30s.  Holy.  Shit.  I wanna high five each and every one of you.

Pinch me, am I dreaming?

Asteinfort

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Re: Case Study: workin for the man
« Reply #24 on: July 16, 2018, 10:06:20 PM »
Not to be a Debbie downer but did you live thru the real estate crash that happened a while back? What's your plan if the real estate market tanks? That's a significant amount of debt.
« Last Edit: July 16, 2018, 10:08:20 PM by Asteinfort »

Finances_With_Purpose

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Re: Case Study: workin for the man
« Reply #25 on: July 17, 2018, 12:55:13 AM »
Well wow.  I typed a response based upon your post and the first few responses, then realized you originally posted in 2014! 

It's awesome to see your progress!  Very encouraging for many on here, I'm sure. 

I made a few suggestions, all but one of which you have done, and I'll leave the last one here, even though it sounds like you already have a start at it with your real-estate side-hustle.  So here's what's left of what I would recommend to you:

1.  Have you thought about doing something *else* after this job?  Instead of running away from government IT, what would you run *towards* if you didn't have to get paid?  Try this aptly-titled book out for ideas on how to move forward now.  I would start thinking now about what else you might do.

I'm sure you can find other places to add value that give your life more purpose/allow you to do more of what you were made to do, whatever that is.  It may help to spend some time investigating what that is.  Then you could make money in ways that you enjoy more, at least, even if it's less money. 

Related to that, you might pick up part-time work that helps you along/means you need less from your stash to retire. 

2.  As for planning, you may want to section your time periods into buckets (before pension, after pension/before SS, after SS).  Also, none of us know your pension system, without knowing which it is, and even then those vary a lot. 

--

As of 2018, that's now all I have...great to see your forward progress!