This morning, I made the last payment on my student loans. That was ~$20,000 that was paid back total, and I won’t miss that debt one bit. The feeling hasn't sunk in just yet. By the end of the month when I start seeing my contributions to the freedom fund increase, that's when the party will start.
Now that that hurdle is cleared, I’m looking for some feedback, suggestions, or advice on how I can reach financial independence sooner. Sure, the obvious thing to say is “spend less, invest more, dummy,” but I’m looking for some more specific guidance. I read a lot about FI, and I’m sold on the idea of freeing myself from the chains of labor to go do what I choose to with my time, and so I’m hunting for ideas to get me there quicker. Any guidance is super-appreciated.
I’ve been a longtime reader of MMM (since late 2011, which is forever in blog years), although I’m a total newbie to the forums. This is my first post on here. I’m tempted to ask you to go easy on me, but I’d rather receive honest criticism than thinly-veiled praise.
That said, here goes:
I’m 26, single, and male. My primary job is as a high school teacher, which I enjoy most days, but don’t want to stick with forever. I foresee myself moving in the next two years to a different school elsewhere in the state. I also serve in the National Guard, which brings in some extra income and has some unique financial perks, and during the summer I operate my own small-time agricultural and fertilizer business (thus my owning a dump truck, listed below).
I’ve been working hard at saving and investing since I was bitten by the personal finance bug at age 20. Since then, my net worth has shot up from around $1000 to just under $120,000, according to the figures I posted here. However, since I’ve been reading online about FI, I’ve learned that that’s more typical than I thought - so much for being smug about my financial success. It pales in comparison to some of the amazing stories on here.
I admit that I’m nowhere near as financially extreme as I was when I started chasing FI. I need to get back with the program - the middle-class life has started rubbing off on me, as evidenced by my unnecessarily lavish expenses.
One of my current goals is to be able to take a year or two off and travel abroad while I’m young and don’t have any dependents.
My current financial picture looks like this, according to Mint.com:
Assets:
Cash on hand $1,472
Roth IRAs $39,051
Stocks/Investments $49,394
subcategories
sharebuilder $35220
betterment $12529
lending club $782
thrift savings $863
Debts:
Credit card debt $0 I only put this up here to point out that I pay my credit card off every two weeks, and have never owed even a dime in
interest. However, I’ve made hundreds of dollars from reward programs, because I love screwing over credit card companies.
Student loan $0
Property worth noting:
2004 Chevrolet Corvette kbb value approx $15,000
I know right now that this is going to be the biggest Anti-mustachian factor that’s on this list and is going to bring the wrath of
the forum down on me.
2004 Hyundai Santa Fe kbb value approx $3000
1990 International dump truck $5500
1989 Coachmen campervan $3000
Sporting goods $1000
Musical instruments $1000
Money owed me $1500
Net worth, based on these numbers $119,917
Income: Somewhat variable, but works out to about $3550 on average.
Primary job $2700
Dividends $50
Seasonal job, stretched annually $400
National Guard $400
Total monthly income $3550
Now let’s get to the nitty gritty - How I’ve been spending my money:
Expenses
Rent $500 That beat-up old campervan looks more and more attractive every day…
Car insurance for 3 vehicles $80
Fuel $200
Car repairs ~$100
Life insurance through SGLI $28
Health insurance $51
Cell phone $65
Storage unit $55
Groceries $75
Eating out $125
Electric $45
Internet $30
Student loan $0 going forward! I only put it here because I’m proud :)
Typical monthly expenses ~$1354
That means that in a typical month, I net about $2000 that I can put toward my FI goals.
Commute: 10 miles each way.
See anything glaring there that I could do to improve?
Now, to address some of those above issues that I know I’m going to hear about. True Mustachians will tell me to ditch the Corvette, extra vehicles, and storage unit at all costs. In order to get to FI quickest, yeah, they’re right.
That said, the Corvette is the biggest issue that’s going to be poked at, and deservedly so. No, it’s not Mustachian. Yes, it’s going to cost me hundreds of thousands of dollars worth of opportunity cost when I’m 65. I get that, and it’ll likely be sold soon. It’s ongoing cost of ownership isn’t substantially higher than other “regular” cars, though - it costs me $55 per month to insure, and gets around 26 mpg on average. Not fantastic, but not as terrible as you’d expect.
The reason that the other car - the Hyundai - exists is because the Corvette is a summertime-only vehicle.
That $55 per month storage unit expense is dumb, I know. The reason it’s there is because I moved out of my apartment and I’m in between work while I’m fulfilling some over-the-summer National Guard training, so I put all my stuff in a storage unit. Yeah, storage units are dumb. I figured paying the $55 per month was justifiable in the short term, though. Once I have a place of my own again, that expense will disappear quicker than you can say “Shoot me in the face, idiotic storage shed.”
As for some habit-y personal stuff:
I track my spending regularly. Save all receipts and tally and tabulate for fun sometimes.
Don’t smoke, drink, or blow money on shit that doesn’t give me some return (restaurants are another story). I have drank too many sodas lately, so that needs to stop. Eat out too much and pay for convenience too often.
I don’t own a home, and until I’m settled in to one geographic place, I know that renting is a dumb move - I’m throwing that money down a black hole every month. I hate it, but because I don’t know where I’ll be living in a couple years, it’s a necessary evil for now.
So, with all that said, any suggestions? Where should I put the extra cash I bring in - same old SPY, high-yield Dividendmantra-style stocks, real estate, or something else?
Where should I cut my spending?
Tell me if I’m being stupid anywhere, please.
How do I measure up for my age, do you think?
And perhaps biggest of all, when is a reasonable time you think I’ll make it to Early Retirement?
Thanks for reading, and thanks in advance for any suggestions!