Life Situation:
Single, (will NOT get legally married, will NOT have any legal kids).
Austin, TX
Age 30
Goals:
Plan is to be FI by age 40.
Current total investments is around 70k
Current living exp is around 19k/yr (this is counting house payments). I honestly do not believe that is enough, but i have done some rusty counts of previous years, and i guess i do stay under 20k/yr.
Nest egg goal is 625,000
I am saving at the full 26,800$ in tax sheltered accounts every year.
At 7% for 10 years that puts me at 500,000$. This is not counting “extra” money that will be saved in tax accounts.
Let’s get on with the numbers!
Gross Salary/Wages:
Hard to answer, base yearly pay is 45,760$, after shift % adjustments, BUT overtime and double time hours can be crazy and come in go. 2016 tax year Gross yearly pay was 53,000$. In 2015 it was 101,000$. I would say a save average over the next 10 years will be 55k-75k.
Individual amounts of each Pre-tax deductions:
401k - 20-35%, i adjust this every month to try and hit the 18k mark without going over.
HSA - 120$/bi-weely (3100$/yr + 250$ from employer
IRA - Flat 5,500$ put in once a year
Total - 26,800$/yr
Other Ordinary Income:
ESPP - 1,000$/yr - This is if the stock says flat and the 15% discount. (last 12 months company stock as doubled. I put in around 12,000 in 3 years, pulled out 26,000$ a few months ago)
Bonus - 4,500$ - Generally 10% of my yearly base pay. This can vary, but in my 3 years it has been 10%, 10%, 11%, if anything this number may go up next few years due to company growth.
Side work - 500$ - Fixing computers, cell phones, xbox, uber, etc….
Rental Income, Actual Expenses, and Depreciation:
Currently collecting 1,500$/mo from roommates, this has averaged out to around 1,152$/mo over the last 4 years as roommates come and go
Do not count expenses since I live in the home too.
Taxes:
Taken out out of my W2 for 2016 was 8,739$ Or around 17%? Seems kinda low?
Property taxes of around 4,000$
Current expenses:
Yearly breakdown from 2016 (oh god sorry for formatting....i tried to fix it)
Exp - amount - Notes
House - 2,500$~ - Personal loan to father /w interest
Home Ins - 1,188$ - I have have no options to adjust online, I have YET to call them to see if there are any discounts I can get, or even have shopped around.
Home Maint - 500$~ - Lights, air filters, repairs, appliances, etc...
HOA - 480$ - I hate my life…..
Medical - 446$ - Health (HDHP), Dental, STD(cost varies with hours worked. I have a somewhat higher risk job than an office job, & life ins x2 (required by employer)
Utilities - 1,100$ - Gas, Power, Water, Trash. Do not charge roommates for utilities. I have solar panels, but summer time i end up having 200$~ bills, fall, winter and spring no bills.
Internet - 1,100$ - Entertainment, roommates, work, see bottom of post for more details
Cell - 888$ - 2 person “unlimited plan” with tmobile. Long story short, in 3 months this will be changing to a new yearly amount of 336$ for 2 phones in 2017.
Car ins - 780$ - I dropped full coverage back in Aug. 2017 should be 480$ for the year! 2010 Honda fit - 85,000mi, and yes, it is a stick! Bought it before i even heard of MMM
Car fuel - 600$ - I actually only spent 250$ in 2016, but i was able to carpool to work for 8 months. That will not be happening this year. Later on i will explain my distance from work and why i haven’t moved.
Car Maint - 250$~ - Cost of oil, tires, air filter, wiper blades, etc…
Car taxes - 150$~ - Inspection & registration
Food - 1,200$ - I rarely bought food from the store until around June. I believe this number will climb to around 1,600$ in 2017. How bad is 130$/mo for one person?
Eating out - 1,800$ - Oops…. I consider eating out my entertainment, and i do used to do it 2 times a day! The number has dropped to 25% starting in July. I expect this to be around 500-700$ in 2017. As i said, this is my entertainment, and my social interactions with other humans.
Alcohol - 68$+100$ - 68 = home, 2 bottles of everclear a year! And 100$ from a few nights out with friends in the year.
Personal care - 50$~ - Body soaps, shampoo, hand wash, laundry soap, etc
Clothes - 10$~ - Socks only. All my shirts come from volunteer work. I have more blood donation. Marathon, and BBBS tshirts than anyone wants to see.
Haircuts - 50$~ - Normally cut my own but went out twice
Entertainment - 200$ - 120$ on PC video games, 80$ on bowling, movies,
Vacation - 1000$ - Most pricey plane ticket of my life, normally cost 250$, this one was at 800$ for Christmas, do NOT plan on doing that ever again.
Charity - 500$ - Normally this number is at 0$, but i helped out a friend, and some others
Total - 11,960$ - Seems about right. This is my first year to track my budget but i have always lived as if i still made 5$/hr.
/w house +2,500$ -
/w land tax +4,000$ -
After house paid off = 15,960$/y
Expected ER expenses: (optional, if relevant)
Possible to buy a used RV. 100k~
Assets:
t401k - 17,500$
r401k - 9,500$
Company match/Rollover (how are these classed?) - 14,700$
rIRA - 12,000$
LC - 5,500$
Taxable- 21,500$
Total - 68,712$
401k - I do about a 75/25 split of T and R to 401k, my current idea is to be able to use the roth money to live off of until for the 5 year delay with roth ladder. This may be a mistake. Investments are broken up 25% towards SM, MD, S&P and euro growth fund (do not have access to international fund). SM and MD both have a better 10+ year track record than the S&P with my 401k plan options.
IRA - same reason as above. 100% in VFIAX
LC - NOT getting any new funds, but i do intend to keep reinvesting what is already there, currently at 16% NAR after 8 months or so.
Taxable - Currently on hold for adding funds. Read notes on bottom of post. Currently 80% in VFIAX, 10% in VNQ (REIT) and 10% in VNUX (international fund)
Liabilities:
House - 54,000$ - Personal loan to father @ 3.77%. Actually is this even a liability since i make money off of it? Read further down post for more details
Car - 5,000$ - No payments, but it does suck having to maintain it.
Some side notes:
House loan:
Father gave me 100,000$ loan to pay off my house (i had already done 100,000$ on my in 5 years. I pay him 3.77%, my bank was at 4.7% with PMI still.
Monthly payment of at least 1,000$, currently paying back around 2,500$ with est completion date of Jan 1 2019, at worst. Depending on overtime, and my next 2 ESPP and yearly bonus, it could be a bit sooner.
I decided to pay off my father ASAP and to not leverage my loan. I know the math clearly says i should take advantage of the loan and invest, but i am choosing to pay off my awesome father.
Cell phone:
I let my grandma piggy back off me, over time tmobile has creeped up our old 60$/mo plan to 84$/mo! Grandma lives far away and not tech savvy. I didn’t want to make her go through changing phones, or learning touch screen. I did find a an old blackberry that will work with TING’s 2G network. Sadly i prepaid a year on my tmobile account and can’t switch off just yet, but in a few months when the credit is up, i will be switching to ting for a huge savings!
Internet:
4 people, all gamers, roommates do HD streaming, I need access to my home PC when travelling for work. I play my games, and do personal things through remote desktop to my home computer. I also host a tor node, this is my charity to the world. This will NOT change while i have roommates. :) Also for some forgiveness points, when i signed up i refused to do it until they gave me the “promotional price for life”, my account says it is active until 2099, 3 years in and it still is active.
Car ins:
I also have a few discounts on the car, defensive driving, benefits program at work, bundled with home ins, loyalty (been with them since i was 14 years old)
Solar:
I do have solar panels, but get stiffed by the city, they even lowered the rates once again this year. When i had just 1 roommate we had NO bill, only the stupid fees and taxes on a 0$ bill. But with 4, and us working all hours of the day/night, it just gets high in the summer. I recently bought one of those smart wifi AC controllers. I will be installing this and hooking my roommates up to the system on their phones. I will ask them to turn it off if they are the last one to leave the house, and to turn it back on slightly before they get home. Do not believe they will do it, but might as well try.
The drive:
I live 22 miles from work, 1 way. Drive is 30mins-90mins depending on traffic, which depends on my current work schedule. I have tried to do the math, for an ebike/DIY ebike and i would have to nearly ride for 2 full years without missing a day. That would cover my gas bill, of course, it does save wear and tear on my car. The ride would be around 45-60min. I could easily do it, i used to ride 40miles a day for fun. Anyways, that doesn’t seem too logical since i wouldn’t be wanting to do that while working 84hrs/week with 13 days on and 1 day off. It just wouldn’t be a good ROI.
I have also debated on moving, or just renting a little place out for me closer to work and ditching my car. My yearly car exp is around 2,000$, not counting wear and tear. I suppose i could also net in another 500$/mo for a 4th person to move into my house. So i would be saving 175$/mo from car, but spending 650$ for a new place to stay, or 150$ IF i rented out my room for 500$ and it had no vacancy. Same as the bike, i do not feel this has a good ROI. The only thing it would be good for is providing me with an extra 18~hours a week of not driving.
Specific Question(s):
Do i look to be on track for FI by age 40?
As shown in at the first, i should be at 505,000$ with JUST counting the tax free accounts. So i believe with house paid off in 2 years, and taking all that extra 2500$ and putting it into tax accounts i should be around 815,000$ in 10 years? More than my goal of 625,000$
Just wanted to see if anyone had any ideas or suggestions for me?
Talk about my drive? Should i get an ebike? Move closer to work?
My spending habits?
401k or IRA changes?
Talk me out of paying off my house loan and invest instead??