Thank you for your advice. I see people said they needed more info so I have copied the format for the case study that is in the sticky of this section of the forum. Below are additional details and answers to the questions posed. Thank you in advance for your advice and analysis.
Topic Title: How should I use $38,400 I have in cash right now? What other changes can I make to get to FI more quickly?
Life Situation: IRS filing status is single but have a serious girlfriend, no dependents, living in Arlington, VA just outside of Washington, DC.
Grew up in a maximum spending upper middle class family. Did not understand the concept of enough or saving really. Just started reading the blog about a month ago and am really trying to wean myself down.
The expenses below are after some major changes if you can believe it. I know I am nowhere near you guys but I’ve changed a lot already to reduce my spending and continue to save.
I had a gambling issue in my mid-twenties and then went to grad school as well so I started at 31 with nothing saved. Most of my savings have come in the last year and a half. About $100k. I wish I was ten years younger and had found this blog and not gotten into online poker, that is for sure.
Gross Salary/Wages: $165,000 per year. My salary history has been chaotic and I am unsure how long this salary is sustainable so I want to maximize investing and saving. I got an 18.5% bonus this year on last year’s salary of $140,000. I have a retention bonus due 12/31/16 of $65,000 and 12/31/17 of $135,000. After that, I don’t know what I will do next for work but I want to be as FI as possible so I have lots of options (including starting a new career, business, or be semi retired)
2002 – $33,000
2003 – $40,000
2005 to 2009 – $44,000 to $70,000
2010 – $40,000 for four days and week while in grad school
2011 – $60,000 in career switch to consulting. No 401k at this company.
2012 – $80,000 finishing grad school
2013 – $100,000
2014 – $100,000
2015 – $140,000 job change. 4% 401k match at this company. Commuter benefit.
Pre-tax deductions:
401(k): 11% 401k at $756.36 per paycheck with 4% match. That should max me out since I took 11% of my bonus that was paid in this year into the 401k
FSA: $104.17 which should max the FSA out at $2,500. I thought I would need this $2,500 but now don’t think I will.
IRA: IRA contributed $5,500 max to a traditional IRA last two years but I make too much for the tax deduction. Note I am not eligible for a Roth contribution at my income level. Maybe I do not understand the recharacterization rules?
Health Insurance: dental insurance is $2.02 per paycheck, 11.20 medical, and $0.30 vision
AGI: ~$94,500
Other Ordinary Income: Sometimes I drive uberX for a couple hundred dollars. I like it because I can see parts of the city I wouldn’t normally go to and meet new people.
Qualified Dividends & Long Term Capital Gains: Capitals gains in 2014 = $(6,020), 2015 = $16,479, 2016 = $2,104
Taxes: Medicare $98 per paycheck. Social Security $419 per paycheck. Federal Income $1,222 per paycheck. State income $325 per paycheck
Current expenses:
Mortgage $1,387 ($242k at 3%)
Condo Fee $350
Food $600
Student Loan $800 (refinanced to a 5 year loan about a year ago. Original balance was $60 something in 2011)
Car Payment $243 ($5,785 at 3.2%. Original loan was around $10,000. 2006 Volkswagen Passat)
Gas $60 (Take dog to dog park every day for about 7 mile round trip)
Cell Phone $65 (Switched to Sprint recently to get 50% off Verizon plan)
Electric $50
Cable/Internet 110 (Hockey is a passion of mine. I have tried every way to find a way to watch it without cable. I cancel the cable in the non-hockey months)
Gym $50
Hair Cut $20
Dog $60
Vacations and clothing can be large-ish purchases once a quarter. Say $200 to $500 clothing and $500 to $3500 vacation. Definitely have cut back on clothing. Working on planning smarter vacations but love to ski and living east and skiing west is expensive. I play in an adult hockey league which runs about $450 2 x per year.
Assets:
I have $38,000 in an investment account. It is currently in cash.
$85,000 IRA (already contributed my 2016 max)
$2,500 Roth IRA
$36,000 401(k) saving 11% per paycheck with 4% employer match