Author Topic: How am I doing?  (Read 5240 times)

fordhamchris

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How am I doing?
« on: November 09, 2012, 06:39:50 AM »
Hi Everyone!  I am new to MMM and the world of mustachism, and I would love to hear from the Pro's on my current situation and how to better it:

1)  No debt (paid off student loans, condo worth about 200k, all cars paid off, etc)
2) Vanguard account recently opened (10k to VFIAX, 10k to VTSAX, 8k in Roth IRA w/ target retirement 2045)
3) about 45k in American Funds retirement account (no matching, through work though)
4) I drive an 08 hyundai sonata and she drives an '11 hyundai SUV (I know- way before I found the blog- they are paid off)

So about 70k or so in investments with no debt and paid off condo.

I am a software salesman making about 200k per/yr (I am almost certain this job will go away soon- very small company who will likely get purchased).  My wife is a nurse making about 65k/yr

We live in CT (high taxes). 

My bills include:

305/month Condo Fees
500/month taxes (CT is highly taxed)
100 gas/electric
300 cable/cell phones (for both of us)
450 gas between the both of us (we both work very far apart but live in the middle- we are both about 50 miles RT to work making biking difficult)
120 or so for insurance

These are fixed costs...


Any opportunities for savings?  Also, as Vanguard continues to grow (I try to throw my commission checks in there) what are some better investments?

Any help appreciated!




Phoebe

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Re: How am I doing?
« Reply #1 on: November 09, 2012, 06:52:36 AM »
What jumps out at me as low hanging fruit is your cable/cell phone bill.  MMM wrote an article about how to cut your cell phone costs, and then just turn off cable!  You should be able to save AT LEAST $200/month if not more.  That's $2400 a year!!

Phoebe

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Re: How am I doing?
« Reply #2 on: November 09, 2012, 06:53:33 AM »
You could also sell your new cars while they are still retaining most of their value and buy reliable used ones.  Throw the proceeds at your investments and watch your 'stache grow!!

Done by Forty

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Re: How am I doing?
« Reply #3 on: November 09, 2012, 09:04:41 AM »
300 cable/cell phones (for both of us)
450 gas between the both of us (we both work very far apart but live in the middle- we are both about 50 miles RT to work making biking difficult)


This would be the low hanging fruit.  Switching out the SUV for say, a car optimized for long commutes (like an older Insight) would help.  The cell phones & cable would also be big.

Food & drink (restaurants/groceries/bars) isn't listed but that may be another area to improve.

With your income it's likely that you can keep making big steps forward regardless, but if you're thinking that $200k a year could be going away soon, it's better to get more efficient now.

skyrefuge

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Re: How am I doing?
« Reply #4 on: November 09, 2012, 10:49:17 AM »
These are fixed costs...

I would guess that your unfixed costs are a lot more important to look at.  Your fixed costs come to $1775/mo, a tiny fraction of what I guess your monthly take-home to be ($14k?)  So you either have the ability to contribute $12k/mo to your Vanguard account, or you're spending a bunch of money elsewhere.  If it's the former, and your current savings rate really is around 90%, you have less than 3 years 'til FI, so in that case your job wouldn't even have to stay around much longer.

With your income, the amount you can shelter from taxes is quite small relative to the total amount you can potentially save, so it is probably good to pay attention to tax-efficiency in your non-sheltered account.  Vanguard offers a few "tax-managed" funds which have the specific goal of minimizing taxable events for you when held in a taxable account.  So it might be a good idea to look at some of those instead of (or in addition to) VFIAX and VTSAX.  They don't have tax-managed versions of S&P500 or Total Market funds, so you can't just replace them, but depending on your total asset allocation goal, you might be able to shift things around between taxable and tax-sheltered accounts to achieve a more tax-efficient overall portfolio.  I personally have their Tax-Managed International and Small-Cap funds in my taxable account, while holding S&P500 and bond funds in my tax-sheltered accounts.

fordhamchris

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Re: How am I doing?
« Reply #5 on: November 09, 2012, 12:53:05 PM »
This is all wonderful advice!  Yes, I have to look at my unfixed costs very closely.
I should have way more $$ (I was anti-mustacian for a long time).  Also, I have only had this job paying big bucks for 4 years (it used to pay less as I am commission based).  I focused all my energy on paying off mortgage (205k), paying off my wife and I's student loans (about 100k), and paying off the two cars (about 40k---i know...).

I certainly will look into tax advantaged accounts- uncle sam is taking way more than I need him to at the moment.

My unfixed costs are not bad, but certainly room for improvement (about $300 in groceries, maybe 150/month in entertainment), etc.

I would love to get this so I can be FI at 35 or so (27 now).  Just hope the job can hold up.

$_gone_amok

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Re: How am I doing?
« Reply #6 on: November 09, 2012, 02:54:13 PM »
I think you are doing great for your age.

I'm curious about the software sales job. Did you receive any special training to become a salesman or you just transited into the role from same company?

fordhamchris

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Re: How am I doing?
« Reply #7 on: November 12, 2012, 06:28:37 AM »
Thanks.  I just fell into the job really.  It is all tele-sales...cold calling for an SaaS product.  I am an "eat what you kill" guy, so 20 percent new business, 10 percent renewals.  Only been at it for a little over 4 yrs.

capital

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Re: How am I doing?
« Reply #8 on: November 12, 2012, 09:18:59 AM »
Commuting-wise, have you looked at public transit/carpooling/vanpooling? Connecticut has pretty good mass transit, as well-- especially with a folding bike, it's possible to do bike-train-bike or bike-bus-bike.

Nursing also isn't very location-specific.

In the longer run, there are a lot of rail lines and urban areas in the Northeast which might provide opportunities to move away from a car commute.

Jamesqf

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Re: How am I doing?
« Reply #9 on: November 12, 2012, 10:27:34 AM »
Since you live in the middle of two fairly long commutes, have you considered moving closer (easy biking distance) to one job?  Probably wife's job, since you think yours might be going away.  Then you replace one car with cheaper commute vehicle, like an Insight or older Prius (or look at telecommuting).

KristinD

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Re: How am I doing?
« Reply #10 on: November 14, 2012, 09:10:57 AM »
What jumps out at me as low hanging fruit is your cable/cell phone bill.  MMM wrote an article about how to cut your cell phone costs, and then just turn off cable!  You should be able to save AT LEAST $200/month if not more.  That's $2400 a year!!

How often do you watch TV? Could you replace your cable service with Netflix or Hulu? If you could make that small change you could save yourself a tidy sum.

Flynlow

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Re: How am I doing?
« Reply #11 on: November 14, 2012, 12:04:35 PM »
You mention your job is tele-sales....is there any possibility you could set up an office in your condo and do this from home?  Has the potential to pay off at least three-fold:

-$$ saved from eliminating one commute (fuel/car/insurance)
-Home office deduction to somwhat help with current high tax problem you mentioned
-Gaining more free time by losing the commute

If you want to go extreme, buy a place closer to your wife's work to shorten her commute (with space for your new home office), and rent the current condo to start gaining rental income from a home that's already paid off.