Author Topic: Reader Case Study: Have any Badassity Boosting Advice?  (Read 1968 times)

echilidog

  • 5 O'Clock Shadow
  • *
  • Posts: 2
Reader Case Study: Have any Badassity Boosting Advice?
« on: December 18, 2013, 12:41:11 AM »
I have a kind of unique high-ish income situation for my age and I'd like to achive FI as soon as possible.  I'm just starting to save so I'd love to get some perspective from those who have already been in my shoes.

Income: I live with my girlfriend.  I'm 27, she's 24.  For next 1.5yrs I am working on a swanky electronic hardware engineering contract.  Paid hourly.

Pretax income ~$100-110k depending on hours, but post tax ~70-80k due to outrageous oregon taxes.

Her income ~$18k

Total ~$8000/month

Current expenses:
Rent: $975/mo including fixed heat,garbage,water.  And it took us a long time to get this rate.  Portland is expensive!
Car: ~$100/month depending on weekend travel/camping trips etc.  2009 Hyundai Elantra.  We almost never use it.  I'd just as soon sell it but my girlfriend does not want to lose it.  The cost includes the spread out effect of a recent $800 repair bill for a timing belt/brake replacement.
Public Transit: $100/month. I ride a train to work,she walks.
Food:  $250/month groceries, $60/month restaurants - we will always like to eat out every once in a while.
Health Insurance: Currently uninsured.  I just signed up for a HDHP, HSA eligible for $160/month starting in January
Power:  We use $35/month.  Seriously.  Tiny apartment and heating is included with rent.
Internet: $30/month
Phones: $60/month
Other Stuff/Travel/Hobbies: ~500/month.  I know, I know this is nebulous and a lot of this is probably not necessary but it's there.  Under mint as "everything else" this always seems to reach a high level.  I would put in here building bicycles, building my 3d printer - which I have used for a few neat home projects, camping/travel gear, and travel expenses.  Honestly I probably won't cut this because this is the kind of stuff I want to do once I reach FI.


Student Loan - I have $2700 left on a $25k loan I started paying summer 2012 after I finished my masters.  Scheduling the final payment TONIGHT!!

Total spending $2270/month if I did my math correctly.

Assets: IRA - ~10k - All stocks.  Vanguard total stock market.
Emergency Fund 10k - I find that should be about 6 months expenses for myself alone.  I may want this a little higher still due to my contract employment situation.
GF's car bought used for ~8k, 2009 Hyundai Elantra.

Specific Question(s): I want to invest as much as possible, but my contracting agency has me as a W2 without benefits, so I have no 401k plan yet despite much nagging.  So my only tax advantaged options are to dump into an IRA, and my HSA.  That's ~9k of tax advantaged investment/yr when I would really like much more.  So far I have been killing my student loan, but now that that's done I'd like to invest more.

My plan is also to be tax efficient.  I can put some small amount of bonds in my HSA - I am planning to divy it 50/50 stocks and bonds.  I already have a stash of US stocks so I think when I start a taxable account I will make it international index.

One potential option I have is to try to start doing some independent contracting work on the side - which might cut into my main contract and potentially lower my pay a bit there, but I could shovel everything I make on the side gig into a Solo 401k.  One of my coworkers said she used to contract in the same field and could refer some people to me if I am interested.  This is my plan for part time retirement work, so I'd like to build up a client base.  The only problem here is if I have enough time to do it when/if I can't scale back my main job.  This is a risk that I am on the fence about.

Also, though I'm not in a huge rush I'd love to buy and/or renovate a house and rental or a duplex/built in unit but I'd like to save up at least 40% for the down payment & build up credit to get a low interest rate.  I can wait to buy until market conditions are favorable too.

So please give me advice!  What can I trim, why should I be punched in the face, and how should I invest my now considerable income??

Thank you for the advice!!!