Author Topic: Share your financial plan!  (Read 2137 times)

brianm37

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Share your financial plan!
« on: April 22, 2017, 09:55:03 AM »
Hi All-

I found MMM after an interview with Tim Ferris. The message hit a real chord and since that time I've been cruising the forum and website. I want to start putting together a financial plan, but can't seem to find a guide for Mustachians. Most guides on the internet assume a retirement age of 65+.

So, my question, how did you plan your FIRE? How to you track and monitor your progress and goals? Do you have a financial plan document? Outside of the foundations (how much do I need, etc), how did you plan for success?

Thank you!

-BTM

HipGnosis

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Re: Share your financial plan!
« Reply #1 on: April 22, 2017, 11:00:21 AM »
Everyone's plan is different because our lives and situations are different.
Goto https://forum.mrmoneymustache.com/case-studies/how-to-write-a-'case-study'-topic/ to get advice that can be applied to you and your situation.

datu925

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Re: Share your financial plan!
« Reply #2 on: April 22, 2017, 04:43:40 PM »
I agree with the case study suggestion if your goal is to figure out where to cut spending, start investing, etc. I would also recommend a tool like Mint that will help you analyze your spending with minimal effort. I review that once a month to get a sense of what I'm spending on, then as patterns emerge, I target the biggest problem areas.

If you're more interested in the tracking element of it, there are definitely some template spreadsheets floating around the forums that you could use. I also believe the Mad Fientist has some tools for this. I don't actually know a lot about these - I made a retirement model on google sheets that I use to track and forecast my net worth (and FIRE date/age).

lisa_mustache

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Re: Share your financial plan!
« Reply #3 on: April 22, 2017, 05:05:50 PM »
I am 4 months new to this, and for me, it's been a combination of loading all of our info into Mint for a full picture of our accounts and spending, making changes that MMM blog posts talk about (cutting cable, cooking at home 98% of the time, shopping around for car insurance, etc), and then making a spreadsheet to track goals and do some scenario modeling.  By setting up Mint and having a few months of practice, I now have what I think is a reasonable estimate of our annual expenses, which you just multiply by 25 to estimate your FIRE target amount.  Then I opened up a Vanguard brokerage account to make regular deposits in (every paycheck, plus any "leftovers" in our checking account each month after the mortgage comes out).  The case study worksheet has a ton of good info and can help get organized and get its "time to FIRE" estimate as well. 

Have fun!!


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MDM

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Re: Share your financial plan!
« Reply #4 on: April 22, 2017, 05:26:47 PM »
Everyone's plan is different because our lives and situations are different.
Goto https://forum.mrmoneymustache.com/case-studies/how-to-write-a-'case-study'-topic/ to get advice that can be applied to you and your situation.
+1

See also https://forum.mrmoneymustache.com/investor-alley/investment-order/.

CowboyAndIndian

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Re: Share your financial plan!
« Reply #5 on: April 22, 2017, 06:25:32 PM »
My financial plan temlate is in my signature.  Hope this gives you some ideas to create your own.


Zikoris

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Re: Share your financial plan!
« Reply #6 on: April 23, 2017, 12:51:49 PM »
Back in February, I did a blog post that I quite liked that encompassed our entire retirement strategy: https://incomingassets.wordpress.com/2017/02/13/the-incoming-assets-retirement-strategy/ We've never actually made a financial plan, other than "Slash spending and save at least 60%".

As far as monitoring and tracking progress, Mint does all that for me while I sleep. I don't really put any effort in on that front. About once a quarter I check what our current 4% amount would be, but that takes all of five seconds. We're big fans of set-it-and-forget-it, rather than anything requiring ongoing effort.


Linea_Norway

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Re: Share your financial plan!
« Reply #7 on: April 23, 2017, 01:15:08 PM »
I made an Excel sheet. I made columns for each year until we expect to receive our pension. Filled in our expected yearly expenses each year. Made a column for possible extra income. Made a row for each financial start stuation, 450.000, 500.000, 550.000 ect. Then a column for the amounted of taxes to pay on house, stock and extra income. I have a parameter for safe withdrawal amount and draw that amount from the stash each year.
This way the Excel sheet as a row for each starting amount scenario. Then I can check fir each year how much stash I need at the start of that year. Then I hope that after x years, we can look at what we saved and what year we could stop. We also see what we need to strive to save to FIRE in a certain year.

aceyou

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Re: Share your financial plan!
« Reply #8 on: April 23, 2017, 08:43:52 PM »
One thing I did when I was in your position of finding MMM for the first time was to work backwards and reverse engineer things.

I didn't start by making a financial plan.  I started by thinking about what I wanted my life to be like, both now and in the future.  I asked my wife lots of questions about she'd like these next 18 years of raising kids too look like.  And what she'd envision an ideal life together to consist of once the kiddos are a bit older. 

These thoughts and conversations were incredibly fun and exciting for both of us.  Here's a very overly simplified account of some things we discussed:

- We want to never NEED to work past 48 years old.  (we were 31/32 when we realized this)
- As our kids grow, we want to be able to travel with them.  We want to spend lots of time with them, especially during the summers.  We want to pay for half of their college expenses. 
- When they are out of the house, we want to be able to travel together.  We want to be active and social. 

Then, I started digging into what it would take financially at each step along the way to make our "ideal life" happen.  Here's a very overgeneralized account of what the financial decisions we made together two years ago:

  • For the next 16 years, we would live off no more than half our income
  • We would refinance to a 15 year mortgage so our house would be paid off at age 47...right before retirement
  • We would buy 5 years so we'd hit our pension at 48
  • We would invest about half our income each paycheck into VTSAX

Then we had to LEARN, because we didn't know how to do this stuff:)  We had to cut auto expenses, food/restaurant expenses, clothing, tv, etc. 

We had to learn about investing, how fees work, how 403's and Roths, and Traditional IRA's, and so on.  We had to learn how to do all the paperwork to move money around. 

We had to not get too pissed at ourselves as we continually realized how sub-optimal we had been living and how f@#$ing rich we could be right now had we just started this right out of college:) 

And gradually, as each month progressed, we got closer and closer.  It's now two years into our new way of living.  We are at about a 55% savings rate.  We are meeting or exceeding every one of our goals. 

Hopefully this gives you some ideas.  If you check out my journal, you can see how I track my monthly net worth, and you can get a more in-depth look at the nuts and bolts. 

Welcome and good luck!!!

Saskatchewstachian

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Re: Share your financial plan!
« Reply #9 on: April 24, 2017, 11:48:19 AM »
One thing I did when I was in your position of finding MMM for the first time was to work backwards and reverse engineer things.

I didn't start by making a financial plan.  I started by thinking about what I wanted my life to be like, both now and in the future.  I asked my wife lots of questions about she'd like these next 18 years of raising kids too look like.  And what she'd envision an ideal life together to consist of once the kiddos are a bit older. 
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Hopefully this gives you some ideas.  If you check out my journal, you can see how I track my monthly net worth, and you can get a more in-depth look at the nuts and bolts. 

Welcome and good luck!!!

Aceyou, great summary and very similar for us. The first question asked wasn't "how much do we need to live on?" it was "How do we want out life to play out?"

We started with items such as kids, when we'd have then, house situation of rent vs own, then own a starter house in the city or build on a acreage, etc.

With those items defined while looking down from the 10,000ft view it lead into other categories like "Ok we know we want kids, do we want to pay for college for them?"

Walking through this Life Plan we agreed on a number of items but also left some categories open as well. Next came the financial aspect. I know our current spending down to the dollar as DINK's but how will that change with 3 kids plus saving for college plus moving to the country, who knows.

So the research phase started, I tried to estimate as well as I could then just tacked on a % to be conservative.

aceyou

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Re: Share your financial plan!
« Reply #10 on: April 24, 2017, 05:50:37 PM »


Aceyou, great summary and very similar for us. The first question asked wasn't "how much do we need to live on?" it was "How do we want out life to play out?"

We started with items such as kids, when we'd have then, house situation of rent vs own, then own a starter house in the city or build on a acreage, etc.

With those items defined while looking down from the 10,000ft view it lead into other categories like "Ok we know we want kids, do we want to pay for college for them?"

Walking through this Life Plan we agreed on a number of items but also left some categories open as well. Next came the financial aspect. I know our current spending down to the dollar as DINK's but how will that change with 3 kids plus saving for college plus moving to the country, who knows.

So the research phase started, I tried to estimate as well as I could then just tacked on a % to be conservative.

Exactly.  So much easier to make a plan and stay the course when you can picture what the other side of the finish line will look like.