Hey everyone! First post here...looking for some advice/optimization.
I'm a 27 year old travel nurse who just discovered FI/RE a few months ago. I started investing 5 years ago when a parent passed away and I received a six figure inheritance. I invested the majority of it over a year period into dividend growth stocks. I know this is not a popular strategy in this community, however, it is my preferred strategy. I enjoy researching companies and being part owner. I also index in my 401k though. I'm single. As a travel nurse, my tax residence is in Ohio but I work all over the country.
Gross Salary/Wages:
This is a bit hard to predict due to the nature of my job. I typically work 44-48 weeks per year. My take home pay also varies by location. I generally take home $1,400-1,900/week. The majority of my income (usually ~$1,100 or more per week) is paid as a tax free per diem stipend. The per diem stipend is cost of living dependent. I would get a much higher stipend working in California versus Ohio etc etc. I have been in lower tax brackets due to the majority of my income coming from this tax free stipend over the last couple years. I also have taken several months off each year to adventure. I've been in the 12/15% bracket the past couple years. Very important for my qualified dividends.
Individual amounts of each Pre-tax deductions 401k, HSA, FSA, IRA, insurance, etc.:
I just now started contributing 86% of my gross income to a 401k. My company matches 50% up to the 6%. If I keep this up I will max out my 401k before years end. I have maxed out my Roth IRA for the past 5 years. I plan to max out my Roth IRA as long as I can. I also have an inherited Roth IRA.
Qualified Dividends: I'm generally a buy-and-hold investor. I make 1-2 sells per year (at most) if something gets very over-valued. I reinvest all dividends. Whether into the same stock or pool them to purchase something else that is undervalued.
Taxes: I won't give specifics on this unless asked due to it varying depending on where I'm working. I'm always in the old 15/12% bracket though.
Assets value as of 5/8/2020
Taxable account: $232,247 with a yield of 3.58% throwing off about $8,300 in dividends this year. This is across 26 dividend paying companies. I plan to increase this yield to close to 5% over the next 5 years or less.
Roth IRA: $36,888 with a yield of 4.76% throwing off about $1,800 this year in dividends. 3 companies currently in this account. Will be increasing over time.
Inherited Roth IRA: $61,253 yielding 2.5% and $1,532 this year in dividends. Only 6 companies currently but I will also increase this over time. This Roth has a minimum required distribution. It goes up every year. This year it was about $1,200. I use this MRD to fund my personal Roth or taxable account.
401k: Less than a a grand in it. Broad based index fund.
Cash: I usually only keep a few thousand at most in cash. I have a very in demand job as a travel intensive care nurse. If a contract was to get cancelled, I could be working again somewhere else in three weeks.
I drive a 2015 Ford F-150 with 92k miles on it. It is paid off. I know trucks aren't popular here but everything I own fits inside of it. This helps when moving from state to state to work. I also use it for backcountry travel for outdoor recreation. I have ZERO debt. I do not have a house payment, credit card debt or student loans. I pay my parents a minimal amount of "rent"/storage fee to keep some of my stuff back in Ohio. I rent short term, furnished housing. My contracts generally are 13 weeks at a time. I'm a dirtbag so I try to find the cheapest place I can. This generally ranges from $700-1300/month. I usually work at least 3 months out of the year in Ohio. During this time I stay with family and don't pay much in rent. I plan to keep on renting for at least the next decade. I carry my own health insurance which costs $200/month. I do not qualify for an HSA. Credit card bills vary each month but they are paid off each month. I can easily save and invest more than 50% of my income.
My goal is continue working full time for the next 5 years. All while saving/investing. At the 5 year mark I would like to drop to working 6-9 months a year until I have a dividend income stream from my taxable account of about $20k/year. I don't plan to never work again. Post FI I plan to pursue some passion projects. Mainly building out a van and traveling around in it all while photographing/documenting my journey. I believe I could turn some type of profit with this in the form of a blog. I am also open to looking into other passive income. From being part owner in businesses to possibly real estate. "Worst" case scenario, I go back to work as a nurse part-time. I would like to get out of healthcare over the next 5-8 years, however.
I backpacked 700 miles on the Pacific Crest Trail last year. I learned how little I need to live and be fulfilled as well as happy. I can't ever see needing more that about $40k in income/year.I don't plan being in a higher tax bracket than I am now.
Specific Question(s):
Since I am trying to increase my dividend stream from my taxable account (to live off of in 5 years) should I be maxing out my 401k? Or just the company match? I know the general consensus is to max the 401k but I do have some concerns. The first of which is that I don't think I will be in a higher tax bracket post FI/RE. The second is that maxing this out would decrease my contributions to my taxable account. Right now I pay no tax on qualified dividends. The next part is that I already have a sizable amount in both my Roths. I plan to continue maxing out my personal Roth and only taking the minimum required distributions from the inherited Roth. Lastly, I couldn't find any similar case studies or articles for someone in my situation in relation to maxing out the 401k or not.
I'm so grateful to be where I am financially at my age but I'm always looking to suggestions. Any other advice or optimization is welcome. Like I said...I just started on the FI/RE journey and I'm so glad I found this site and community. I look forward to reading about others' journeys and sharing mine as well!
Please let me know what questions you have.
Thanks in advance to everyone!