Author Topic: Financial Trajectory!  (Read 3976 times)

Mustache_In_Training

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Financial Trajectory!
« on: April 09, 2014, 11:06:15 AM »
I started reading MMM about 8 months ago and was instantly hooked. In that time, a lot of changes have been made and are still happening. I'm giddy with excitement so I have to share our progress! I would like to share this info with friends, but don't want to come off as braggadocios or condescending when explaining how soon I will be able to never work again. My wife and I are both fortunate enough to have engineering jobs in which we make a nice salary, that is definitely a driving force behind our ability to save.

In the past 8 months we went from a savings rate from <10% to ~50% and drastically reduced our spending. All the while ratcheting up savings to 401k, Roth IRAs and began to divert money to a taxable investment account as well. It's been an exciting time for us.  So, being an engineer, I geek out with excel and enjoy making graphs. I have graphed our investments and debt over time. The only debt we have is a mortgage 160k@4.75% which we are attacking with vigor by doubling up payments. Essentially, barring nuclear fallout or a zombie apocalypse we should have NO debt and over $1M in 9 years! This is just by going on autopilot savings, not doing anything differently than we currently are. Sweet!



Currently I am 27, wife is 25 - We should be able to enjoy a comfortable retirement by our mid 30's.

P.S. We are still spending too much, I have attached our monthly spending so you can punch me in the face or offer any suggestions!






« Last Edit: April 09, 2014, 01:22:21 PM by Mustache_In_Training »

warfreak2

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Re: Financial Trajectory!
« Reply #1 on: April 09, 2014, 11:30:43 AM »
Welcome.

$125/month on phone bills, plus $36/month on internet - this is quite a lot. See this thread, you can almost certainly get this down by more than half.

$600/month on food - even for two people, you'll be able to find lots of ways to cut this without suffering, if you want to.

$800/month on "misc" - track your expenses better, this is far too much money to not know what you're doing with!

$85/month on gym membership - you know exercise is free, right?

$32/month on "lawn care" - mow your lawn yourself.

Total $510/month on your car - do you have bikes? If so, use them more. If not, get yourselves a couple of bikes immediately.

At your current spending rate, you would need $1.4MM to retire, which isn't happening in the next 10 years on your graph. But reducing your expenses is a double whammy - your saving rate goes up, but also your cost of living goes down and you can retire on less.

Mustache_In_Training

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Re: Financial Trajectory!
« Reply #2 on: April 09, 2014, 11:42:32 AM »
Hi warfreak2!

As I said, I know we spend too much money. A large portion of that is the mortgage which will be gone in ~8-9 years. After the mortgage is gone our yearly expenses is right around $30k, which $1M should easily sustain.

I expected a few jabs about the $800 MISC. category... I put that as a catch-all category for travel, gifts, etc. I do need to get a better handle on that. Also, I enjoy my Crossfit gym far too much to give up the $85/month. To me, there's always a balance between making yourself happy and saving. :)

Oh and by the way, car expenses are ungodly high because I commute 55 miles to work each way! Ouch! Been looking for work closer to home, but there are some complications such as my work is currently paying for my graduate degree and would have me repay the tuition amount if I jumped ship.
« Last Edit: April 09, 2014, 11:45:57 AM by Mustache_In_Training »

warfreak2

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Re: Financial Trajectory!
« Reply #3 on: April 09, 2014, 12:07:32 PM »
As I said, I know we spend too much money. A large portion of that is the mortgage which will be gone in ~8-9 years. After the mortgage is gone our yearly expenses is right around $30k, which $1M should easily sustain.
Oh, I misinterpreted your your chart, i saw a line at the bottom about the mortgage so i figured it wasn't part of the total. Silly me!

Normally, you don't count the mortgage as an "expense"; only the interest is an expense, the rest of it gets added to your balance, just like if you transfer money from a current account to a savings account, it's not an expense.

Quote
Oh and by the way, car expenses are ungodly high because I commute 55 miles to work each way! Ouch! Been looking for work closer to home, but there are some complications such as my work is currently paying for my graduate degree and would have me repay the tuition amount if I jumped ship.
OUCH.

And moving closer doesn't sound like an option either. How long is that going to last?

I'm not sure how much the tuition would cost if you had to pay it yourself, but compare it with your $6000/year car bill plus an extra two hours every working day - it's up to you what value you assign to your free time, but it should be quite high - don't underestimate it.

Cromacster

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Re: Financial Trajectory!
« Reply #4 on: April 09, 2014, 01:01:52 PM »
P.P.S. Anyone know why I can't insert images into the post using a public dropbox link?

If you open the pic in your dropbox, in the lower right corner there is a symbol that is three dots.  Click this, then click view original.  That will open the URL that is compatible with the [img] code.

Mustache_In_Training

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Re: Financial Trajectory!
« Reply #5 on: April 09, 2014, 01:05:15 PM »
Quote
And moving closer doesn't sound like an option either. How long is that going to last?

I'm not sure how much the tuition would cost if you had to pay it yourself, but compare it with your $6000/year car bill plus an extra two hours every working day - it's up to you what value you assign to your free time, but it should be quite high - don't underestimate it.

If I stay on track, I will be done with grad. school in 1.5 years. Leaving me with 2 years of servitude to my current company. I am going to a fancy pants school which costs about $5k/class, and I will take a total of 9 classes for a total of $45k. I have run the numbers of commuting to include how much my time is worth based upon my current salary (if I was paid to sit in the car for 2 hours) and it still appears I am better off at my current job, assuming a closer job would still involve a minor commute.

That being said, I don't mind my job, it's actually good as far as jobs go. So I've got that going for me. I also have a carpool buddy, so we share the treachery together and it helps tremendously with gas.


Mustache_In_Training

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Re: Financial Trajectory!
« Reply #6 on: April 09, 2014, 01:23:49 PM »
If you open the pic in your dropbox, in the lower right corner there is a symbol that is three dots.  Click this, then click view original.  That will open the URL that is compatible with the [img] code.

Thanks!

spoonman

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Re: Financial Trajectory!
« Reply #7 on: April 11, 2014, 08:58:59 PM »
Another young couple on the MMM warpath!  Congratulations, you guys are an inspiration for everyone!

2527

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Re: Financial Trajectory!
« Reply #8 on: April 12, 2014, 10:56:35 AM »
Congrats!  You are on a good path.