Author Topic: Invest 50% of my take home pay in 2015.  (Read 47174 times)

peterpatch

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Invest 50% of my take home pay in 2015.
« on: February 06, 2015, 07:42:55 PM »
Hi Everyone,

I am laying down another gauntlet.

My first gauntlet was extremely successful. I already have >60K in positive networth 2 years after eliminating my University loan debt.

To get through this you have to invest 50% of your take home pay in 2015.

I consider the payoff of loan principal an investment due to the interest you will no longer have to pay as a result. Therefore I encourage those with negative net worths to also participate. If you have high interest rates then that could mean 7-10% guaranteed returns, you're not going to find that kind of offer in the markets right now so take advantage! Note this also means you any new debt counts as an expense.

You don't even need to invest the money right away, maybe you need time to think of the best place to put your permanent capital. I get it but you have to swear, on the honour of the mustache, that you are eventually going to use the money for retirement investing capital in order to participate in this gauntlet.

I will post monthly updates on my own results.

Best of luck to all!
 
« Last Edit: February 06, 2015, 07:49:19 PM by peterpatch »

Hey It's Me

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Re: Invest 50% of my take home pay in 2015.
« Reply #1 on: February 06, 2015, 07:45:51 PM »
I'm in! My goal is actually to live off of my side-job income and invest 100% of my take-home from my main job in 2015. Let's see how this goes, but so far so good.

Retired To Win

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Re: Invest 50% of my take home pay in 2015.
« Reply #2 on: February 15, 2015, 06:13:19 AM »
... I consider the payoff of loan principal an investment due to the interest you will no longer have to pay as a result. Therefore I encourage those with negative net worths to also participate...

So that would mean that, for homeowners, the principal portion of their mortgage payments would count towards that 50%  savings goal.

2Birds1Stone

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Re: Invest 50% of my take home pay in 2015.
« Reply #3 on: February 15, 2015, 06:48:34 AM »
As this was a goal of mine for 2015, I am IN!

Zamboni

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Re: Invest 50% of my take home pay in 2015.
« Reply #4 on: February 15, 2015, 07:02:56 AM »
I'm in!  Thank you for setting up this gauntlet to keep us from slipping.

Right now 57% of regular salary is just straight into my automatic savings/payments (403b not counting employer match, Roth IRA monthly autotransfer, 457 monthly autotransfers, mortgage principal.)  Wow, that feels good and it's relatively effortless!  The next step for me will be making sure I invest at least 50% of my two bonuses this summer.  I need to paint my house and travel to visit family, so I just have to be careful not to fritter the rest of it away.

johnny847

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Re: Invest 50% of my take home pay in 2015.
« Reply #5 on: February 15, 2015, 07:40:48 AM »
I'm in!

Currently I'm over 50% invested of my pay for the year, but this doesn't exactly count because I decided to lower the size of my emergency fund. So it wasn't that 50% of my pay was directed at investments.

But because I use YNAB to balance my budget down to zero to maximize investments, the amount of money that is not spent = amount of money invested. So by this logic, I am at a net negative amount of money invested out of my paychecks, because I have to pay school fees and rent three times a year (on campus housing) - January, May, and August. I should be in the positive by the end of the month though.

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Re: Invest 50% of my take home pay in 2015.
« Reply #6 on: February 15, 2015, 08:24:23 AM »
So quick update: I'm all set up with my 401(k) at my new employer and am automatically deducting 50% of my gross paycheck to 401(k) and 15% of gross to the employee stock purchase program. That's 65% of gross automatically, so I don't have to think about it. (Although 401(k) will max out in Q4, so then I'll have to make a conscious effort towards tIRA and taxables.)

peterpatch

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Re: Invest 50% of my take home pay in 2015.
« Reply #7 on: February 17, 2015, 05:31:33 PM »
... I consider the payoff of loan principal an investment due to the interest you will no longer have to pay as a result. Therefore I encourage those with negative net worths to also participate...

So that would mean that, for homeowners, the principal portion of their mortgage payments would count towards that 50%  savings goal.

Yes (sort of). You should also accrue a reasonable amount to cover future maintenance costs. For example if you know you have to buy a new roof in three years and have nothing saved for this then you should count 1/36 of the cost of a new roof for each month your are laying down the gauntlet.

I'll leave everyone to the honour system but the point of this challenge is to leave yourself permanent investment capital. If you know that any of your 2015 gauntlet savings will eventually be spent on future ongoing expenses then you are cheating!!!

« Last Edit: February 17, 2015, 05:34:20 PM by peterpatch »

peterpatch

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Re: Invest 50% of my take home pay in 2015.
« Reply #8 on: February 17, 2015, 05:37:17 PM »
As this was a goal of mine for 2015, I am IN!

Good Luck!

peterpatch

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Re: Invest 50% of my take home pay in 2015.
« Reply #9 on: February 17, 2015, 05:37:49 PM »
I'm in!  Thank you for setting up this gauntlet to keep us from slipping.

Right now 57% of regular salary is just straight into my automatic savings/payments (403b not counting employer match, Roth IRA monthly autotransfer, 457 monthly autotransfers, mortgage principal.)  Wow, that feels good and it's relatively effortless!  The next step for me will be making sure I invest at least 50% of my two bonuses this summer.  I need to paint my house and travel to visit family, so I just have to be careful not to fritter the rest of it away.

Sounds like you have a good system in place which is very important! Good luck!

peterpatch

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Re: Invest 50% of my take home pay in 2015.
« Reply #10 on: February 17, 2015, 05:38:25 PM »
I'm in!

Currently I'm over 50% invested of my pay for the year, but this doesn't exactly count because I decided to lower the size of my emergency fund. So it wasn't that 50% of my pay was directed at investments.

But because I use YNAB to balance my budget down to zero to maximize investments, the amount of money that is not spent = amount of money invested. So by this logic, I am at a net negative amount of money invested out of my paychecks, because I have to pay school fees and rent three times a year (on campus housing) - January, May, and August. I should be in the positive by the end of the month though.

Glad to have you in on the challenge!

peterpatch

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Re: Invest 50% of my take home pay in 2015.
« Reply #11 on: February 17, 2015, 05:39:42 PM »
So quick update: I'm all set up with my 401(k) at my new employer and am automatically deducting 50% of my gross paycheck to 401(k) and 15% of gross to the employee stock purchase program. That's 65% of gross automatically, so I don't have to think about it. (Although 401(k) will max out in Q4, so then I'll have to make a conscious effort towards tIRA and taxables.)

65% is awesome! You're almost at early retirement extreme levels (75% +)!

ontario74

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Re: Invest 50% of my take home pay in 2015.
« Reply #12 on: February 19, 2015, 05:54:35 PM »
It's great how when you start auto-saving you don't even notice it after a while. Having less money to fritter on crap and watching the amounts increase is incredibly satisfying.

Once I pay off the mortgage (4 to 5 years, depending on whether I finish it a lump sum or not) I'll be at 50% savings. Currently at 20% savings and hoping for 25% if, when I get a pay increase.

If I hold steady for 10 years at 50% I'll be able to retire at 55.


bigalsmith101

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Re: Invest 50% of my take home pay in 2015.
« Reply #13 on: February 19, 2015, 07:56:19 PM »
I'M IN!!!

I'm going to have to up the ante a bit for myself. Current spending for wifey and I is just under $1400/mo right now. This means that we save about 20% of wifey's income (while she waits for her internship to start in Sept). Meanwhile we save 100% of my take home pay. Right now this means we save about about 75% of our gross total income. My pay isn't consistent, but the worst we can do on my lowest pay is 65%...

So I'll jump in with the requirement that we meet or exceed 65% for the entirety of this year!!!

Edit: If we decide to put 20% down on a house, does that mean we invested it towards our Financial Independence if it meets rental requirements for the future?
« Last Edit: February 19, 2015, 08:05:03 PM by bigalsmith101 »

morning owl

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Re: Invest 50% of my take home pay in 2015.
« Reply #14 on: February 20, 2015, 05:08:23 AM »
I'm in!

My income is variable, so in some months 50% might be challenging. But I'll aim to save an average of 50%.

With what I'm expecting to make this month, I should be able to save 80% of February's income! I will save 50% into my investment accounts, and 30 into a "deferred income" fund for myself, for the lower income months. Fifty percent is a great goal for me.

Thanks for the challenge!

MLKnits

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Re: Invest 50% of my take home pay in 2015.
« Reply #15 on: February 26, 2015, 06:31:11 AM »
I'm in! I think I can do this. My plan for the year would put me at 60%, but as a chunk of it comes from tax savings*, I think it's really more of a 50%.


*if my tax refund would be $10,000 based on how much I put in a tax-deferred account, I also put in the $10,000 which would otherwise be owed as taxes--so is that $10,000 part of my take-home, really? If it is, the overall savings percentage of take-home is just north of 50%.

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Re: Invest 50% of my take home pay in 2015.
« Reply #16 on: March 01, 2015, 05:18:48 PM »
Y'all may already know this, but a 50% savings rate will get you -- starting from zero savings -- to FIRE in about 15 years.  My question then to all of you who are accepting the challenge is: if you manage to keep this up, how old will you be (in 15 years) when your badass savings rate has gotten you to your FIRE threshold?

innkeeper77

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Re: Invest 50% of my take home pay in 2015.
« Reply #17 on: March 01, 2015, 09:22:13 PM »
You are counting loans? Ok! I guess I'm in- and will keep this challenge up. We are a bit behind schedule of our true ER investing goals, but are currently paying off 0% debt (fixer upper house improvements- we find it worth it. They go to 20% interest if not paid off quickly..), some student loan debt, and of course a mortgage. - The debt means we are NOT yet on track for FIRE, but it does fit the letter of the challenge. And it's a necessary step that will take less than a year to completely deal with.

DW: 3% to 401k, then her salary pays student loan minimums, the mortgage, and living expenses. Savings- 15%
Me: 6% to 401k, the rest to debt. Savings- 100%
Ignoring taxes, this puts us at 59%. With taxes it is of course less..

Plans to increase the savings:
1- Pay off 0% short term debt,
2- Refinance mortgage (Expensive PMI.... but we had a large grant and the numbers were preferable to renting) This involves some more spending to get the house ready, but nothing like before and we can do all the work ourselves. - This will increase principal payments, while reducing monthly minimums. (We will consider a 15 year too)
3- kill student loans, allowing that interest and principal to be invested.
4- Side gigs and new jobs to eventually increase incomes. All extra income and gifts go to debt currently.
5- Not giving in to discretionary spending for quite a while. Standard mustachianism. Summer will mean cheaper utility bills!

Retired To Win: We aren't at zero, but it's close to that. 15 years from when the aggressive debt reduction switches to savings would put us at late 30's. Not great, not bad at all- but that's just why we need to get to significantly over 50% savings!

mandy_2002

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Re: Invest 50% of my take home pay in 2015.
« Reply #18 on: March 02, 2015, 04:18:58 PM »
I'm in!  I was at 49% last year, so I'll set my goal at 55% for this year.

Thanks for the challenge!

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Re: Invest 50% of my take home pay in 2015.
« Reply #19 on: March 04, 2015, 02:58:19 AM »
Nice challenge! Last year I managed to save 75% of my take home pay (including 401k) before discovering MMM this year. Although with a baby on the way, perhaps it would be best to challenge myself to maintain that 75% rate for this year. Both the DW and I got raises at work this year, so it should be doable.

Kananas

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Re: Invest 50% of my take home pay in 2015.
« Reply #20 on: March 04, 2015, 05:14:36 AM »
Okay, I'm in too. So far I have counted only extra payments toward mortgage as savings/investments, but if I count the principal payments too, I think I can manage a 50% savings rate. I've had a pretty good start of the year, but my salary is not going to be as high for the next few months and also my wife is on a maternity leave, so it's not going to be easy.

Here are my stats:

Jan -15, 66,2% (51,9% without counting the mortgage principal payment)
Feb -15, 60,6% (48,5%)

2Birds1Stone

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Re: Invest 50% of my take home pay in 2015.
« Reply #21 on: March 04, 2015, 06:04:01 AM »
Y'all may already know this, but a 50% savings rate will get you -- starting from zero savings -- to FIRE in about 15 years.  My question then to all of you who are accepting the challenge is: if you manage to keep this up, how old will you be (in 15 years) when your badass savings rate has gotten you to your FIRE threshold?

I will be 43 years old in 15 years. However have 4x annual expenses saved so I am shooting for FIRE in 12 years, will be 40 =D

mandy_2002

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Re: Invest 50% of my take home pay in 2015.
« Reply #22 on: March 04, 2015, 10:41:26 AM »
Y'all may already know this, but a 50% savings rate will get you -- starting from zero savings -- to FIRE in about 15 years.  My question then to all of you who are accepting the challenge is: if you manage to keep this up, how old will you be (in 15 years) when your badass savings rate has gotten you to your FIRE threshold?

I started saving chunks of money long before MMM entered my life.  Plus, the "shockingly simple math" assumes that your cost of living remains constant.  I'm about 6 years from retirement with this assumption, and 2.5 years using my own assumption that I'll reduce my cost of living significantly, since I plan to leave the sunny state of California for greener pastures (literally, I live in a desert area of the east bay, and I'd really like more green in my life). 

TheOldestYoungMan

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Re: Invest 50% of my take home pay in 2015.
« Reply #23 on: March 04, 2015, 02:48:51 PM »
I'm on track this year to hit 58% savings rate, not counting mortgage payments.  That's including taxes as an expense.  If I use just take home, then I'm at 66%.  Feels like cheating though as most of this is saved at the pre-tax rate.  This will be more than twice as much savings as last year, but I'm also not planning on buying a house this year :).  100% of any raises and side hustles will go into savings as well. 

My single largest expense is still FICA+SS+Medicare.  These are all estimates, but I expect my AGI to be down into the 15% tax bracket this year, which will be wicked :).


morning owl

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Re: Invest 50% of my take home pay in 2015.
« Reply #24 on: March 07, 2015, 11:07:26 AM »
Y'all may already know this, but a 50% savings rate will get you -- starting from zero savings -- to FIRE in about 15 years.  My question then to all of you who are accepting the challenge is: if you manage to keep this up, how old will you be (in 15 years) when your badass savings rate has gotten you to your FIRE threshold?

If I manage to save 50% I'll be FI in 3 years, at age 45.

clarkfan1979

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Re: Invest 50% of my take home pay in 2015.
« Reply #25 on: March 07, 2015, 12:06:00 PM »
I'm in. I think we were at 44% in 2014, so 50% would be a nice goal to shoot for.

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Re: Invest 50% of my take home pay in 2015.
« Reply #26 on: March 08, 2015, 04:10:26 PM »
... I'm about 6 years from retirement with this assumption, and 2.5 years using my own assumption that I'll reduce my cost of living significantly, since I plan to leave the sunny state of California for greener pastures (literally, I live in a desert area of the east bay, and I'd really like more green in my life).

Relocating the hell out of a High Cost Of Living area is also what I did -- and what everybody should at least try to do.  In my case, the relocation (and the selling of the expensive house to buy the "same" house for a lot less in my new location) knocked many years off my wait to reach FIRE.

So... carry out that plan, mandy.  It's a good one.

MikeBear

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Re: Invest 50% of my take home pay in 2015.
« Reply #27 on: March 08, 2015, 05:18:34 PM »
I'm 56 this year, and am currently investing on track with 73% of my take-home pay this year. That's UP from 59% in 2014 after I discovered MMM, and made changes (mad scramble) to be able to do this at such a high level.

I had $169k socked away in my 401k at the beginning of 2014, and now have $219k + $9.5k in my new Vanguard Roth IRA.

I'm kicking myself all the way for not already having this inline 10 years ago though. I should be at least at $500k right now, and it's hard to get over the feelings that I "don't have enough time left" to pull it off. "If only's" regrets SUCK!

I WANT TO retire NOW! lol

« Last Edit: March 08, 2015, 06:04:13 PM by MikeBear »

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Re: Invest 50% of my take home pay in 2015.
« Reply #28 on: March 08, 2015, 09:30:38 PM »
I'm in.

I was at 33% last year including mortgage/extra principal payments even though I was living out a lifestyle inflation nightmare (buying consumerist crap). The first couple months of the year look bad on paper because a lot of annual/semi-annual bills hit, but March is shaping up well.

Already have my tIRA covered and need to hammer down on the rest of our tax deferred before I start pounding the brokerage.

johnny847

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Re: Invest 50% of my take home pay in 2015.
« Reply #29 on: March 08, 2015, 10:01:55 PM »
Currently cash flow negative for the year =/.

But I pay rent and school fees three times a year. One such payment was in January. I should become cash flow positive this month, and if last year is any indication, I should be able to hit the 50% mark without too much difficulty.

MikeBear

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Re: Invest 50% of my take home pay in 2015.
« Reply #30 on: March 09, 2015, 02:50:27 AM »
Anybody have comments on this article?

http://thefirestarter.co.uk/calculating-savings-rate/

johnny847

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Re: Invest 50% of my take home pay in 2015.
« Reply #31 on: March 09, 2015, 11:04:40 AM »
Anybody have comments on this article?

http://thefirestarter.co.uk/calculating-savings-rate/

Scenario A:
Wrong. MMM isn't assuming a 4% real rate of return. If you look at the graph and how he says 50% savings rate is going to get you out of the rat race in about 16 years, he's assuming 10% return. Unfortunately, I don't know what the graph assumes (real vs nominal), but I assume it'd have to be real return for it to make sense.

Scenario B:
This is just stupid. I know MMM said take home pay. But this doesn't make sense, for the exact reason that Fire Starter says - you can end up with a savings rate of over 100%, which would mean you should've retired earlier. But Fire Starter puts take home pay into the net income row on his chart. That's stupid. Net income isn't the same as take home pay. If I make $50, put $18k into a 401k, and pay $3k in taxes (don't know if these numbers comply with the tax code, but irrelevant for this discussion), then my net income is $47k and my take home pay is $29k. You don't calculate savings rate based on take home pay. You calculate savings rate based on net income.

Scenario C:
Fire Starter conveniently ignores Monevator's disclaimer
Quote
This is the final piece of the puzzle – the return that swells your investments into your own financial life support system.

However you calculate it, this number will be wrong. If I (or anybody else) knew what the market is going to deliver over the next couple of decades then I wouldn’t be writing this blog post. I’d be flicking through What Tropical Island? magazine.

Also, Monevator thinks a 4% real return is reasonable. Pfft. Yea right.

Myth 4:
Yea including mortgage principal payments into savings is subject to debate. I'm not going to opine on this.

Scenario D:
Using real return of 4%. S&P from 1950-2009 has had a real return of 7%. Sure, you don't wan to be 100% stocks, but the 4% real return assumption is not backed by historical data. And yes, the past isn't an indication of future returns. But since nobody knows what the future holds, and we have to assume something for these calculations, I don't see a better assumption to make


TheOldestYoungMan

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Re: Invest 50% of my take home pay in 2015.
« Reply #32 on: March 09, 2015, 04:17:04 PM »
Anybody have comments on this article?

http://thefirestarter.co.uk/calculating-savings-rate/

The various methods all work, as long as they are applied consistently.  For instance, with mortgage, if you are including mortgage payments in the savings rate, then you need to include future mortgage payments in the expenses.  If you're planning to be FIRE only after the house is paid off, then you wouldn't need to consider both.  But if the goal is to die with no money left, but not with debt, then the home equity would be tapped at some point, because dying with a paid off house missed the mark.  If you aren't going to have the house paid off when FIRE, then that monthly mortgage payment becomes part of your monthly expenses going forward, and you'll need more stash to pay for it.

You need to draw a line and then stick with it, making consistent assumptions for your calculation.

To do a thorough calculation, for myself, it ended up requiring a truly massive spreadsheet that tracks cash flow and net worth, with projected values to provide a range of estimates.  I update it monthly with the real values of various accounts and updated estimates of savings based on past performance, to see in real time how my choices are affecting my end date.  Included in this spreadsheet is my expected withdrawal strategies and their tax implications.  Doing withdrawal wrong makes a difference of years.

It took me a couple of hours to build this thing, but it gives me more information about where I'm going wrong and what the improvements I make will affect.

It is, of course, wrong, but the date is consistently getting farther away, which is progress :Pd:

My morbid sense of humor actually had me build it not to show when I could retire, but how soon I needed to die to not be broke if I retired today vs various time horizons...

So the unknowns in my sheet are:

1.  What the market will do.  I use 7% for future returns, and then as I fill in each month the actual experience fills in how I did.  Graphs from the past performance help with motivation!  (Ride that bull baby!)

2.  What social security will do.  I use 75% of the SS benefit estimator calculations, which reflects my new-found optimism ( I used to use no social security) and age 70.5 for benefit start.

3.  What healthcare will do.  I use $2,000/yr as an estimate of that cost post FIRE, but that is a wild-ass-guess.

4.  What taxes will do, and what the rules on retirement accounts will be.  I use the current rule-set, with brackets and deductions.

5.  The things I don't know about.  As a for instance, did you know some states charge a percentage of a vehicles value as the registration fee?  I'm thinking of relocating once I FIRE but that's the sort of shit that catches me by surprise, I don't even know what questions to ask.  I also don't know how much marijuana costs but once I'm not subject to employer drug testing I think it's going to come up.

To retire now I'd have to die before I turn 63.  Since I can't count on that...it's back to work tomorrow...

What I learned most from the track-everything exercise was how much January costs.  More than 1/3 of my annual expenses occur in January, so I can probably heavily mitigate the impact of a recession by thinking of November-January as my "working" season for any part-time stuff I try to do.  That works out as lots of places look to hire on extra folks around then.

johnny847

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Re: Invest 50% of my take home pay in 2015.
« Reply #33 on: March 09, 2015, 04:22:13 PM »
What I learned most from the track-everything exercise was how much January costs.  More than 1/3 of my annual expenses occur in January, so I can probably heavily mitigate the impact of a recession by thinking of November-January as my "working" season for any part-time stuff I try to do.  That works out as lots of places look to hire on extra folks around then.

I'm curious - would you mind sharing why that is?

TheOldestYoungMan

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Re: Invest 50% of my take home pay in 2015.
« Reply #34 on: March 09, 2015, 04:50:42 PM »
Property taxes and property insurance premiums.  It's also when my car insurance is due and when various professional and licensing fees are due.  I'll probably keep those up for awhile in FIRE due to the extremely lucrative nature of any part-time work it brings me.  I could spread the premiums out per month, but I get better rates if I'm willing to pay for a whole year.

All told the bill ran me $8.5k this year.

johnny847

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Re: Invest 50% of my take home pay in 2015.
« Reply #35 on: March 09, 2015, 05:04:16 PM »
Property taxes and property insurance premiums.  It's also when my car insurance is due and when various professional and licensing fees are due.  I'll probably keep those up for awhile in FIRE due to the extremely lucrative nature of any part-time work it brings me.  I could spread the premiums out per month, but I get better rates if I'm willing to pay for a whole year.

All told the bill ran me $8.5k this year.

Ah that makes sense. And dang, that's a hefty bill.

ontario74

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Re: Invest 50% of my take home pay in 2015.
« Reply #36 on: March 10, 2015, 06:27:27 PM »
Y'all may already know this, but a 50% savings rate will get you -- starting from zero savings -- to FIRE in about 15 years.  My question then to all of you who are accepting the challenge is: if you manage to keep this up, how old will you be (in 15 years) when your badass savings rate has gotten you to your FIRE threshold?

Age 55 and not from zero

I'd continue to work or go to school to keep my mind occupied :D

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Re: Invest 50% of my take home pay in 2015.
« Reply #37 on: March 18, 2015, 07:30:43 PM »
Y'all may already know this, but a 50% savings rate will get you -- starting from zero savings -- to FIRE in about 15 years.  My question then to all of you who are accepting the challenge is: if you manage to keep this up, how old will you be (in 15 years) when your badass savings rate has gotten you to your FIRE threshold?

Age 55 and not from zero

I'd continue to work or go to school to keep my mind occupied :D

That's dang close to how it went for me.  I was able to pull the trigger at 53 after starting from around $100K at 42.

Good luck on your FI journey.

Susan

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Re: Invest 50% of my take home pay in 2015.
« Reply #38 on: March 19, 2015, 05:29:11 AM »
I'm in as well. Last year I saved over 50% of my take-home pay. This year that will be hard because of an expensive vacation coming up and lots of weddings this year.

1500 is invested automatically per month, which is about 56% of my total income this year. But I think some of it will have to come from savings since I won't be able to get a 50% SR. I'll however try to make money through some other ways to save 50%.

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Re: Invest 50% of my take home pay in 2015.
« Reply #39 on: March 22, 2015, 06:26:05 AM »
Nice challenge! Last year I managed to save 75% of my take home pay (including 401k) before discovering MMM this year. Although with a baby on the way, perhaps it would be best to challenge myself to maintain that 75% rate for this year. Both the DW and I got raises at work this year, so it should be doable.

At your 75% savings rate, you're already WAY up the scale.  Be careful you don't have a "frugality burnout."  Starting from zero savings, that 75% savings rate (I think) will get you to FIRE in about 10 years.  And you already obviously have a head start.  Just keep it up; you are doing very, very well.

Good luck.

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Re: Invest 50% of my take home pay in 2015.
« Reply #40 on: March 24, 2015, 05:40:41 PM »
It looks like I am going to come in at a 46% savings rate this month, just short of the 50% goal. However April will bring  $5K tax return (which I will reinvest most of) so that should put me in good shape year-to-date.

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Re: Invest 50% of my take home pay in 2015.
« Reply #41 on: March 24, 2015, 05:56:02 PM »
I should come in around 80% savings rate for the month, but my monthly savings rate is screwy because I pay rent + school fees three times a year. So during the three months I pay rent and school fees, I usually end up with a negative savings rate.

I'm on track for 50% savings rate for the year though.

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Re: Invest 50% of my take home pay in 2015.
« Reply #42 on: March 26, 2015, 04:03:29 AM »
I saved 77% of my take home pay is month. I didn't invest it all though, as I like to have a cash buffer for my slower months. But I invested 59%! Feels pretty good :)

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Re: Invest 50% of my take home pay in 2015.
« Reply #43 on: March 26, 2015, 10:29:30 AM »
Im in. Hoping to be above 60% but will definitely hit 50%.

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Re: Invest 50% of my take home pay in 2015.
« Reply #44 on: March 29, 2015, 09:06:24 PM »
Well, it feels weird given that I am already FIRE'd, but my savings rate for March is 66% of my passive income for the month.  So, it's another month that I don't come close to spending all the cash generated by my investments -- which means another month that my Discretionary Fund gets larger still.

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Re: Invest 50% of my take home pay in 2015.
« Reply #45 on: March 30, 2015, 04:31:34 AM »
I made my wife's 2014 Roth contribution this weekend. I already front loaded my 2015 tIRA contribution in January. That brings my investment rate up to 58% so far this year.

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Re: Invest 50% of my take home pay in 2015.
« Reply #46 on: March 30, 2015, 05:36:34 PM »
Do you plan a budget for frugal vacations or do you not do any vacations during this time?

Vacations always make me feel rushed and anxious because taking more than a week is usually not understood in my industry (construction, "Make hay while the sun shines"). So, I prefer staycations if I have time off (lay off, lack of work, etc). They're even more luxurious because I don't have to do any planning/prep (aka work) to make them happen!

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Re: Invest 50% of my take home pay in 2015.
« Reply #47 on: March 30, 2015, 08:33:49 PM »
Wow everyone has some big savings plans it seems.  If you are saving 50% of your take home pay, depending on how much you make, you will be in pretty good shape with in 5-10years.  Do you plan a budget for frugal vacations or do you not do any vacations during this time?

It's in my budget, but subsidized by cc signup bonuses.

For example:
I am leaving on Monday for a 13 day trip to Korea and Japan. By signing up for two Amex cards, my out of pocket cost for my flight to Korea and my flight home from Japan was $100. I found a discount airline that will fly me from Korea to Japan for $93.

In Korea, I am staying with family.

In Japan, all but one of my nights are spent in capsule hotels (basically you get this capsule thing that's the size of an oversized coffin). Capsule hotels are super cheaper, something like $30/night. The exception is one night in a ryokan, a traditional Japanese style hotel. Total lodging costs in Japan: $276.21.

I will be taking a bullet train from Kyoto to Tokyo, which will cost about $120.

Total out of pocket expenses so far: $589.

Obviously I will be spending money on stuff there, like food, transportation, and attractions. Not sure how much this will cost. Probably like $60 a day in Japan? Dunno. Let's assume that for now. I'm there for 7 days, so $420.
As for day to day costs in Korea, I expect this to be near zero, as I will mostly be spending time with family, and they will pay for pretty much everything (I'm still a student so they see me as needing financial help)

CC signup bonus from Barclaycard Arrival Plus: $444.44

Total estimated out of pocket cost: $565
Though of course, that $60/day in Japan could be terribly wrong. I don't think it'll be too far from the truth, but we shall see. The great exchange rate helps a lot though.

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Re: Invest 50% of my take home pay in 2015.
« Reply #48 on: March 31, 2015, 09:32:22 PM »
I'm in.  We save ~40% of take home on autopilot, so it should only take a little attention to detail to make 50% happen.

Jakobpunkt

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Re: Invest 50% of my take home pay in 2015.
« Reply #49 on: April 01, 2015, 07:40:49 AM »
I'm new to the forum, but I'd like to try this challenge. I have a question though. My partner's employer provides a defined benefit pension plan, and withholds 12% of partner's salary (pre-tax, tax-deductible) as a contribution. Does this count towards our 50%?

I'm of two minds. On the one hand, sure why not? It's money that's contributing directly towards our retirement income. I did some calculations based on their benefit formula vs. just investing and it looks like the income the pension provides would be approximately equivalent to us investing the money at 7% and then drawing it down at 4%, so that seems fine.

On the minus side, there's no way we can access any income from that money until partner turns 55, and I'd like to retire before then (he's 36 now). So our ER income would have to come from money we save not counting that 12%...

What do you think? Does the 12% count?