Topic Title: Reader Case Study - your question here
Life Situation: Single Filer, Single Male 29 Phoenix, AZ
I tried to put as much detail as possible and will respond when I can, but might be delayed with studying or work. Please ask and punch away.
I am a data analyst at a financial company. I made a big mess of my 20s by drinking and partying way too much. I spent a lot on bottle service, food, traveling to visit a long distance GF and a lot of other stupid things. I also lived alone for 3 years and never really regulated my spending. About a year and a half ago I finally decided to start dealing with things and have lost almost 50 lbs. Stopped drinking since June 28, 2014 and am working out consistently and feeling good about myself and my future for the first time in a long time. I really wish I could throttle my old self, but I cannot. So I am focused on moving forward and making positive life choices. I am currently single, but I would like to have a wife and kids in the future. I am studying for the GMAT and would like to go back to school and double or triple my salary. I am currently living in a room in a condo for $450 a month which isn't sustainable. As a relic of my future life I am currently carrying a lot of credit card debt working towards paying it down. As a result of a promotion I will be eligible for a year end bonus of around $3 or $4,000 paid in January and then a bonus in the summer based on company metrics that should be around $12,000 or so. I averaged out my expected salary to a gross monthly income. So I don't really gross $5,500 a month. Also the net to invest in taxable is currently negative because of the amount I am paying for credit card.
Gross Salary/Wages: Before any deductions New job with 2 bonuses around $68,000 so around like $5,500 a month
Pre-tax deductions:
Roth 401k $418
Pretax Health Ins. $28
Pretax Vision/Dental Ins. $13
HSA/Pension $20
Life/LTD Insurance $4
Subtotal pretax: $483
Employer match $167
Employer 10% quarterly $450
Roth IRA $350.00
Roth 401k/403b $418.00
Investment Total $768
401k, HSA, FSA, IRA, insurance, etc. - whatever you have
Other Ordinary Income: None currently
Qualified Dividends & Long Term Capital Gains: None currently
Rental Income, Actual Expenses, and Depreciation: None currently
Adjusted Gross Income: $64,701
Taxes: Federal, state/local, and FICA.
Federal tax $783
State/City tax $211
Soc. Sec. $337.25
Medicare $78.87
Self-employment Tax $0
Total income taxes $1,410
Current expenses:
Rent $450
Cable TV $75
Car Insurance $93
Car Maintenance, Registration, etc. $5
Christmas/Holidays $40
Clothing/Shoes $40
Credit card payments/Interest $1,092
Dental Insurance $16
Dining (Pizza, Restaurant, etc.) $150
Dry Cleaning $10
Emergency Fund $200
Entertainment $300
Fuel/Public Transport $65
Groceries $110
Lunches $64
Phone (cell) $85
Trainer/Gym $225
"Student Loans" $189
Travel/Vacation $85
Non-mortgage total $3,294
The trainer/gym is a promotional rate for 1 year and will finish in about 7 or 8 months. Working on lowering/eliminating cable.
Expected ER expenses: (optional, if relevant)
Not sure yet, I will probably relocate in the future for more job opportunities or to the Midwest to live closer to parents. So eventually a house and kids expenses. Not sure where or when but something to keep in mind.
Assets: Amount & description - include current asset allocation plan if you have one
Car 1997 Honda Civic fully paid off maybe $1,000
Name Account Value
Short-term reserves
Vanguard Tax-Exempt Money Mkt $100.00 0.10%
Subtotal $100.00 0.10%
Name Account Value
Bonds and bond funds
Vanguard Wellington Fund Inv (35%) SEP IRA $9.03 0.00%
Vanguard S-T Investment-Grade Inv Roth IRA $98.38 0.10%
Vanguard Ext Duration Treasury ETF Roth IRA Brokerage Account—$480.48 0.70%
Vanguard High-Yield Corp Fund Adm Employer Plan $3,841.96 5.60%
Vanguard Tot Intl Bond Ix Institl - 6,415.82 9.30%
Subtotal $10,845.67 15.70%
Name Account Value
Large domestic stocks & stock funds
TESLA MOTORS INC —Traditional IRA Brokerage Account—$6,257.28 9.10%
Vanguard Wellington Fund Inv (65%) —SEP IRA $16.78 0.00%
Vanguard Energy Fund Investor Roth IRA $471.03 0.70%
Vanguard Health Care Fund Inv —Roth IRA $2,533.77 3.70%
Vanguard Energy ETF —Roth IRA Brokerage Account—$791.74 1.20%
Vanguard Ist Tt St Mk Idx Ist Plus (64%) - $11,974.50 17.40%
Vanguard PRIMECAP Fund Admiral - $5,683.27 8.30%
Subtotal $27,728.36 40.40%
Name Account Value
Mid/small domestic stocks & stock funds
Vanguard REIT ETF —VanguardAdvantage™ Account—$80.73 0.10%
Vanguard Capital Value Fund Roth IRA $116.36 0.20%
Vanguard Selected Value Fund —Roth IRA $100.72 0.10%
Vanguard Ext Mkt Index Inst Plus $4,191.55 6.10%
Vanguard International Growth Adm (5%) $328.62 0.50%
Vanguard Ist Tt St Mk Idx Ist Plus (36%) $6,735.65 9.80%
Subtotal $11,553.63 16.80%
Name Account Value
International stocks & stock funds
Vanguard FTSE Emerging Markets ETF VanguardAdvantage™ Account—$217.17 0.30%
Vanguard Total Intl Stock ETF VanguardAdvantage™ Account—$194.84 0.30%
Vanguard Total Intl Stock ETF Roth IRA Brokerage Account—$735.37 1.10%
Vanguard International Growth Adm (95%) $6,243.72 9.10%
Vanguard Tot Intl Stock Ix Inst Pl $10,993.32 16.00%
Subtotal $18,384.42 26.80%
Name Account Value
Other stocks & stock funds
CREDIT SUISSE VELOCITYSHS DAILY 2X VIX SHORT TERM ETN —Traditional IRA Brokerage Account—$112.80 0.20%
CREDIT SUISSE VELOCITYSHS DAILY 2X VIX SHORT TERM ETN —Roth IRA Brokerage Account—$5.64 0.00%
Subtotal $118.44 0.20%
Total $68,730.53 100.00%
Total $68,730.53
Liabilities: Description, original loan amount, rate, original length, and monthly payment (which should be consistent with a spreadsheet PMT calculation). Add current balance and time remaining if close to final payment.
Credit Cards Shown Below: A lot of this is zero balance and I am working towards paying off the other debt.
Credit Card Balance XPS rolldown calculator current month payments remaining to pay zero balance until % utilization midpoint limits
capital one $900.00 $150.00 $195.32 -$45.32 9/11/2015 22.50% $2,000.00 $4,000.00
amex $768.43 $64.04 $64.04 12/1/2015 76.84% $500.00 $1,000.00
dividend $549.62 $50.00 $50.00 $0.00 42.28% $650.00 $1,300.00
chase $3,635.96 $100.00 $100.00 90.90% $2,000.00 $4,000.00
discover $4,478.20 $180.00 $180.00 74.64% $3,000.00 $6,000.00
us bank $1,986.17 $100.00 $100.00 39.72% $2,500.00 $5,000.00
forward $2,743.76 $144.41 $44.11 $100.30 3/1/2016 63.81% $2,150.00 $4,300.00
us airways $3,450.43 $202.97 $202.97 2/10/2016 86.26% $2,000.00 $4,000.00
bank of america $4,295.50 $204.55 $204.55 4/1/2016 85.91% $2,500.00 $5,000.00
new egg $950.00 $100.00 $50.00 $50.00 12/1/2015
total $23,758.07 $1,295.96 $339.43 $389.23 $17,300.00 $34,600.00
Zero Balance amount $13,108.12 55.17%
Total spreadsheet viewable here:
https://docs.google.com/spreadsheets/d/1HIzUiWi_yxNyDyBus3ZviTFtC0oFYkfcgbuFt2oADbo/pubhtmlStudent Loans:
Original Principal Current Principal Rate Original Length Excel PMT
$10,659 $9,443 6.50% 194 $57.74
$14,366 $12,726 6.50% 194 $77.81
Around $48,783.07 total
Specific Question(s): Providing a detailed breakdown is important, so is asking for specific information so we know what kind of help/advice you are looking for.
The big question: What should I be targeting as the number to achieve financial independence early? There are a lot of variables so I know it will be difficult I'm assuming like $2 millon? I would like to travel more as well.
1- Will I be able to afford children? What is the cost on 2 children? Not sure if I will end up in high or low COL area yet.
2- Where can I improve my expenses? I have some ideas, but maybe I’m blind to something.
3- I will be hopefully going back to school in a year or two. It would be additional debt but with an increased salary after. How can i minimize the impact of graduate school on ER?
4- What else do I need to worry about?
5- My parents are divorced and have saved money for retirement. My mom should be fine, but my father has health issues and only social security. How can I make sure they don't suffer in the future?
6- How did you meet spouses who were ER focused and how early should debt talks come up in a relationship?
7- If business school doesn't work out, what are some next steps to take to arrive at ER?
8- Once I am done with the GMAT what are some good side hustles to make more $? I was thinking of getting a newer car and driving lyft or uber. I live right by a lot of clubs and an airport. Due to my job I can't take something in the financial field to avoid conflicts of interest. But I should be able to do something outside once I get it approved. A lot of people at my work go the real estate route, but I don't think that is for me.
Please let me know if you have any other advice! Willing to listen! Thanks