Author Topic: $4,000/month saved - Finally automated it  (Read 5314 times)

PeachFuzzInVA

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$4,000/month saved - Finally automated it
« on: May 10, 2016, 11:11:54 PM »
About 2 years ago, I figured $4,000 per month saved would be the magic number for us to retire in 10 years time and still lead a comfortable existence. Life got in the way and after a few pay cuts, job changes, my wife graduating nursing school, and me opening my own business, we're now FINALLY able to securely save $4,000 every month. We were able to start with a $28,000 cushion, but this week marks the 2nd week of automated transfers of $1000 from our checking into our brokerage account (plus also deposited another $640 from credit card rewards from business purchases!). I was worried we couldn't achieve it at first, but 2 transfers in, I'm feeling confident that we'll be able to get by without having to dip into savings.

monte0930

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Re: $4,000/month saved - Finally automated it
« Reply #1 on: May 10, 2016, 11:49:05 PM »
Congrats, it is a great feeling when you gain control of your finances.

forummm

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Re: $4,000/month saved - Finally automated it
« Reply #2 on: May 11, 2016, 08:01:23 AM »
Nice, that's a healthy savings rate. I bet you can increase it and cut another couple years off your time to FIRE.

rockstache

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Re: $4,000/month saved - Finally automated it
« Reply #3 on: May 11, 2016, 08:59:44 AM »
Wow congrats, that is amazing!

Are you also contributing the max to 401Ks and IRAs outside of that?

calimom

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Re: $4,000/month saved - Finally automated it
« Reply #4 on: May 11, 2016, 09:35:03 PM »
That sounds great! Is it on top of your retirement savings or included? Either way, it is a wonderful savings goal.

PeachFuzzInVA

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Re: $4,000/month saved - Finally automated it
« Reply #5 on: May 12, 2016, 07:28:31 PM »
Congrats, it is a great feeling when you gain control of your finances.

Thanks! It really does!

Nice, that's a healthy savings rate. I bet you can increase it and cut another couple years off your time to FIRE.

We're working on it. I'm already plotting on ways to add an extra $1000/monthly to that figure!

Wow congrats, that is amazing!

Are you also contributing the max to 401Ks and IRAs outside of that?

To be honest, no. We need to be doing that. We've got $24,000 in my wife's IRA currently. I had to liquidate mine a few years ago to get through some hard times and have never started contributing again. Neither one of us have 401k's at work as I'm self-employed running a very small business and she's still in the 1st year of her new job as an RN. That makes it even more important for us to be stashing as much away into taxable accounts as possible.

That sounds great! Is it on top of your retirement savings or included? Either way, it is a wonderful savings goal.

It's included. We were both a disaster financially before getting married between divorces happening before we met, lawyers fees, exes running up enormous credit card bills. When we finally got back on our feet together, I was making enough for her to cut back at work and go to nursing school and then halfway into her first semester my company decided that my position paid too much, so I was out of a job and took at $35,000 paycut. We managed to make it through her nursing school without taking on any additional debt due to me starting a side business that was making a few hundred dollars extra every month. Once she graduated and accepted the position she's in now, we agreed that I should turn my side-business into a full time business, so we've been reinvesting our profits heavily into the business. It's just now grown to the point where we can pull the extra $1000 out for savings without risking running cash flow too low.

Dexterous

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Re: $4,000/month saved - Finally automated it
« Reply #6 on: May 14, 2016, 02:19:48 AM »
You should max both of your IRAs prior to investing in taxable accounts.  The tax savings will be significant.

PeachFuzzInVA

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Re: $4,000/month saved - Finally automated it
« Reply #7 on: May 14, 2016, 04:04:33 PM »
You should max both of your IRAs prior to investing in taxable accounts.  The tax savings will be significant.

Any suggestions on where to find a simplified explanation of how to access that money before 58 1/2? I've seen bits and pieces mentioned around here in various threads, but never really any full explanations.

name_was_taken

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2Birds1Stone

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Re: $4,000/month saved - Finally automated it
« Reply #9 on: May 15, 2016, 07:14:39 AM »
I 2nd maxing out any available tax advantaged space!

You will still be able to funnel plenty into taxable, and once FI there are many ways to access the tax deferred funds as well.

csdreaming

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Re: $4,000/month saved - Finally automated it
« Reply #10 on: May 22, 2016, 06:24:06 PM »


Open a solo 401k at Vanguard. You can contribute both employer (20% or 25%, can't remember) and employee (18k) a year. You can also open up a SEP-IRA and a traditional IRA for additional savings.

Any money you make in investments is tax free and also you don't have manage reporting it. (As long as you stay away from LP's or MLP's, etc.) This saves you not only money but time as well. See the Roth rollover guide on how to withdraw contributions early.