Author Topic: Some Questions (looking for advice)  (Read 3826 times)

soczab

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Some Questions (looking for advice)
« on: December 13, 2013, 02:33:11 PM »
A random question (well two I suppose).

So, some background.  I have a job i enjoy doing, but it doesnt pay a 'ton'.  I make (before tax) 30k a year and am in my late 20s.  I invest about a third of that currently.... half going towards retirement half to an 'emergency investment' fund in betterment.  The employer also kicks in a percent of my salary into a retirement account (its not a match, they just do it whether i contribute or not).  I have a used car paid off, but tend to only use it on the weekends to pick up groceries and the like.  Got a pile of student loans that are big enough im never going to be able to pay off i suspect, so i'm just doing the minimum while i wait for the 10 year non-profit forgiveness to kick in.    I could probably cut back a bit more if im honest.  Most of my expenses are food (groceries and i tend to eat out once or twice on the weekend) and the student loans.  Otherwise, im pretty frugal and luxury for me is to buy a book now and then etc.

So my question is two fold. 

1) I feel like i'm on roughly the right track here being responsible... but any advice is welcome.

2) I feel like a lot of the people ive read in this forum (and even MMM himself!) purposely looked for jobs that paid better than what im doing, so that they could put more into savings and thus retire earlier.  I know i'm way way way underpaid for my education even if its more in the 'arts' (ive got two masters, a phd, and am working on an mba (its free with my job) currently) but I also really like what I do.  So I guess what i'm looking for is advice on how realistic a life plan it is  to expect to retire only earning 30k a year?  Or should I maybe be looking for a job I might not like as much but would pay a lot more letting me achieve financial Independence earlier?  Ultimately I get that's a personal decision of course.  But I guess i'm looking for some feedback on whether its doable to get that early retirement when a fella is making 30k a year as opposed to like 50.

Khan

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Re: Some Questions (looking for advice)
« Reply #1 on: December 13, 2013, 07:04:06 PM »
The problem is banking approx. 10-15k/year just doesn't push the needle that much, and that's of course assuming that things don't change in your life drastically(health issues, kids, marriage, what's your current housing situation?).
Here's a simple investing calculator to play around with: http://www.daveramsey.com/article/investing-calculator/lifeandmoney_investing/#/entry_form

It really comes down to a question of what you're here for. ERE's goal was to retire as quickly as possible. MMM's was, after he realized it, to retire and be a full-time family man(and play host to this community). Nord's is to be a beach bum in Hawaii with his family.

So what does the understanding of the possibility of FI/RE do for you? For me, it makes me ridiculously happy that I don't have to be stuck in the middle class employer-employee relation("Please sir, can I have another?"[paycheck]). It makes me happy that in the event of being fired, I can smile, shake the Bob's handshttp://www.youtube.com/watch?v=nV7u1VBhWCE, and walk out the door and on with my life. I have plans that are only going to happen because of the stash I have available thanks to my past actions, and the freedom that that buys me, and no, it isn't enough to FI off of, but I don't care, it's enough to say "fuck you" off of. If FI happens when I'm 35-40 and unhappy, fine. If I'm happy and that age, fine. If I don't actually reach FI till 50's but I'm supremely satisfied, fine.

Who knows, maybe if you look for higher paid work, you'll still enjoy/love it? Maybe you'll find higher paid non-profit work(nonprofit doesn't have to mean low pay). Maybe you're happy with where you are, and good for you if you are! All I can say is that you've fenced off a piece of land and said that my grass is pretty green, maybe it is, maybe it isn't.

Frankies Girl

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Re: Some Questions (looking for advice)
« Reply #2 on: December 13, 2013, 09:15:10 PM »
Making more money is great, but if you're truly happy where you are, then I wouldn't necessarily say to quit that job and go find something that might pay you better but will make you miserable. If you can find some side hustles that could add to your stache, then by all means and do keep an eye out for something better paying that you'd enjoy, but I wouldn't say that you're in a horrible position.

What is your end goal? To retire super early? To be financially independent but work for the standard amount of time? Travel the world or buy a little house and settle down somewhere? As soon as you figure out what exactly you're working towards, that is going to give you a better idea of what you need to achieve it.

And something that has been said very often around here - it's not the dollar amount of your savings; it's your savings rate and the amount you can live on that matters. If you're saving a third of your current salary and living comfortably on the rest, then I'd suggest making sure that you don't succumb to lifestyle inflation and funnel every extra raise, bonus and side hustle profit into your savings/investments.

I'd also take a closer look at things like the car situation - if you're not driving it but a few times a month, that's an expense you could probably dump and funnel into savings (maintenance/insurance).

Empire Business

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Re: Some Questions (looking for advice)
« Reply #3 on: December 14, 2013, 12:17:13 AM »
Another question (that you don't have to answer here, but you have to answer for yourself for the math) exactly how much in student loans are we talking about getting forgiven after ten years? 

You will need to weigh the pros and cons of obtaining private segment employment (and all the negatives that go with that) plus paying the loans yourself.

annaraven

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Re: Some Questions (looking for advice)
« Reply #4 on: December 14, 2013, 01:19:38 AM »
A random question (well two I suppose).

So, some background.  I have a job i enjoy doing, but it doesnt pay a 'ton'.  I make (before tax) 30k a year and am in my late 20s.  I invest about a third of that currently.... half going towards retirement half to an 'emergency investment' fund in betterment.

...

I know i'm way way way underpaid for my education even if its more in the 'arts' (ive got two masters, a phd, and am working on an mba (its free with my job) currently) but I also really like what I do.  So I guess what i'm looking for is advice on how realistic a life plan it is  to expect to retire only earning 30k a year?  Or should I maybe be looking for a job I might not like as much but would pay a lot more letting me achieve financial Independence earlier?  Ultimately I get that's a personal decision of course.  But I guess i'm looking for some feedback on whether its doable to get that early retirement when a fella is making 30k a year as opposed to like 50.

I'm a newbie here. So take my opinion with a grain of salt or three.

If you love what you're doing AND putting away a third of your income toward retirement? You're doing it right. As far as I'm concerned, if you're getting paid to do something you love, you're already where everyone else wants to be. (MMM gets paid to do what he loves - he may call it retirement but running this board is work and he does get money from it.) You may want to look for other opportunities to do what you love and get paid more, then go for it. But don't take a sucky job just to put away more toward retirement. 

Aside from that - I agree on dumping the car and getting a bike with panniers so you can do your shopping with that. It'll help you stay healthy and you won't need a gym. ;-)

killingxspree

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Re: Some Questions (looking for advice)
« Reply #5 on: December 14, 2013, 05:55:57 AM »
maybe your goal should shift more towards building up a part-time stash and later on maybe you can re-negotiate your hours at work

lifejoy

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Re: Some Questions (looking for advice)
« Reply #6 on: December 14, 2013, 11:06:49 AM »
"If you have a job you love, you won't work a day in your life".

Your current job - would you do it still, if you were FI? Would FI be worth it if you found a higher paying job that sucked out your soul?

I'm in your position right now... sort of. I got a new job that is great but part-time (major pay-cut) but my old/current job is sucking out my soul. What to do, what to do?

Another idea is this: you can always just try something new. If it doesn't work out, maybe you could go back?

ragstoroths

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Re: Some Questions (looking for advice)
« Reply #7 on: December 14, 2013, 03:39:14 PM »
The fact that your employer is investing in you by paying for your MBA and contributing to your 401k makes me think that they will be willing to pay you more in order to keep you there after you earn your next degree, as well. Have you had a conversation with your boss about a possible promotion and/or pay increase once you finish your MBA? There's no reason you cannot make more doing what you love, especially if you have the work experience and educational background to merit that extra pay. If they're not willing to negotiate, there must be a similar company out there doing similar work that will.