Race from $2M to $4M...and Beyond!

[farmecologist]

...

On the good news front, both kids are graduating from college this year ( one undergrad, one masters degree ).  So we are pretty much done with the college years...woo hoo!  Our son ( the undergrad ), is a Physics/Astrophysics double major and has done quite well...so there is a great chance he can land a fully paid grad school gig.

Congrats, that's a huge step.

Thanks...yes, it really is a huge step! 

We were somewhat "prepared", and have/had money in 529 plans.  However, the money we have in there never seems to be enough, even with our planning.  It still boggles my mind how expensive college is...even at our in-state university.  Not only tuition, but the ridiculous rise in rents in just a few short years.  Since I have had kids in college for quite a while now, I have seen the rent increases with my own eyes...and it is just freaking outrageous.

But on a good note, we should be able to get them out of there with no debt.   I'll give them credit too...they both made enough to pretty much pay their rent all the way through college, and they both landed decent scholarships ( but still a drop in the bucket ).  Our son does needs some assistance with rent this year, but that is because he did a "research internship" this summer.  Cool stuff - he was working with data from NASA's Parker Solar Probe.  Unfortunately, "research internships" don't pay diddly squat, but it should help him land that grad school gig.

https://science.nasa.gov/mission/parker-solar-probe/

Our daughter?  She is in grad school to become a therapist.  She also works at a brewery...and makes way, way more than I thought would be possible.   It is a hard job though, but bartending ( at least at this one ) pays extremely well.

[couponvan]

...

On the good news front, both kids are graduating from college this year ( one undergrad, one masters degree ).  So we are pretty much done with the college years...woo hoo!  Our son ( the undergrad ), is a Physics/Astrophysics double major and has done quite well...so there is a great chance he can land a fully paid grad school gig.

Congrats, that's a huge step.

That is good news. One down, and 2 at 1/3. Once they are done it will be much easier to manage it all.

[tooqk4u22]

...

On the good news front, both kids are graduating from college this year ( one undergrad, one masters degree ).  So we are pretty much done with the college years...woo hoo!  Our son ( the undergrad ), is a Physics/Astrophysics double major and has done quite well...so there is a great chance he can land a fully paid grad school gig.

Congrats, that's a huge step.

That is good news. One down, and 2 at 1/3. Once they are done it will be much easier to manage it all.

Our oldest will start college next year, the middle the year after that, and the little 2 years after that.   My goodness is it crap ton, I fantasize about being the many people we know who spend all their money incessantly on YOLO and then get to college years and whine about how much debt their children will undertake.   

DW and I joke about "who would want an expensive vacation home anyway?" 

[farmecologist]

...

On the good news front, both kids are graduating from college this year ( one undergrad, one masters degree ).  So we are pretty much done with the college years...woo hoo!  Our son ( the undergrad ), is a Physics/Astrophysics double major and has done quite well...so there is a great chance he can land a fully paid grad school gig.

Congrats, that's a huge step.

That is good news. One down, and 2 at 1/3. Once they are done it will be much easier to manage it all.

Our oldest will start college next year, the middle the year after that, and the little 2 years after that.   My goodness is it crap ton, I fantasize about being the many people we know who spend all their money incessantly on YOLO and then get to college years and whine about how much debt their children will undertake.   

DW and I joke about "who would want an expensive vacation home anyway?"

Haha...we have had similar conversations.   But you know what?  Cabins/Beach Houses/Vacation Homes are a lot of work!  At least that is how we rationalize it. 

4 kids to put thorough college...ouch!  We had a tough enough time with two!

[Allie]

Oh dear lord.  Mine are 10/12 and reading the college stories is just ratcheting up my anxiety.  It was bad when we started planning 10 years ago, is worse right now, I don’t even want to think about what college will be costing in another 10 years.  I keep thinking that it can’t get any worse…then it does!

[SwordGuy]

Oh dear lord.  Mine are 10/12 and reading the college stories is just ratcheting up my anxiety.  It was bad when we started planning 10 years ago, is worse right now, I don’t even want to think about what college will be costing in another 10 years.  I keep thinking that it can’t get any worse…then it does!

In state tuition at a number of NC universities is reasonable.  If you are FI or close to it, move near one of them in time for them to qualify for in-state tuition. 

[farmecologist]

Oh dear lord.  Mine are 10/12 and reading the college stories is just ratcheting up my anxiety.  It was bad when we started planning 10 years ago, is worse right now, I don’t even want to think about what college will be costing in another 10 years.  I keep thinking that it can’t get any worse…then it does!

In state tuition at a number of NC universities is reasonable.  If you are FI or close to it, move near one of them in time for them to qualify for in-state tuition.

Interesting you mention NC universities.   Yes...they are reasonable for in state residents, as you mentioned. 

My daughter attends grad school at Chapel Hill and wasn't a resident her first year....that was an ouch moment.  It took some work, but thankfully, she is a resident this year...and just that saved us around 20K in tuition!  She also landed some great grants this year as well.

Another thing that hit us hard is the massive increase in rents.  We did NOT expect that while planning a few years back.  So it isn't just tuition to worry about these days.  The days of "cheap rent", even for college students, are long gone.

[farmecologist]

Oh dear lord.  Mine are 10/12 and reading the college stories is just ratcheting up my anxiety.  It was bad when we started planning 10 years ago, is worse right now, I don’t even want to think about what college will be costing in another 10 years.  I keep thinking that it can’t get any worse…then it does!

At least people like us DO long term planning to help put our kids through college and are somewhat prepared.  There are many, many parents that can't or won't do that.

[Dancin'Dog]

Hopefully, they all avoid falling for mates with a mountain of student debt too.  That's the hurdle you can't plan for.  ;)

[tooqk4u22]

Haha...we have had similar conversations.   But you know what?  Cabins/Beach Houses/Vacation Homes are a lot of work!  At least that is how we rationalize it. 

4 kids to put thorough college...ouch!  We had a tough enough time with two!

Three kids but when I read my comment I see the little 2...should have been the little in 2 years...haha.

Oh dear lord.  Mine are 10/12 and reading the college stories is just ratcheting up my anxiety.  It was bad when we started planning 10 years ago, is worse right now, I don’t even want to think about what college will be costing in another 10 years.  I keep thinking that it can’t get any worse…then it does!

The struggle is real and never gets better....I was hoping the demographic/enrollment cliff (it's a thing due to lower population) would cause prices to decline (a la less demand)   but nope it's seems that (1) schools feel that they can jack prices to make up for lost revenue from lower enrollment and (2) smaller schools are simply closing / going under.  It's bizarre


And yes, in the total cost of attendance the housing is usually greatly understated and rents have been rising fast.

[tooqk4u22]

Oh dear lord.  Mine are 10/12 and reading the college stories is just ratcheting up my anxiety.  It was bad when we started planning 10 years ago, is worse right now, I don’t even want to think about what college will be costing in another 10 years.  I keep thinking that it can’t get any worse…then it does!

In state tuition at a number of NC universities is reasonable.  If you are FI or close to it, move near one of them in time for them to qualify for in-state tuition.

Interesting you mention NC universities.   Yes...they are reasonable for in state residents, as you mentioned. 

My daughter attends grad school at Chapel Hill and wasn't a resident her first year....that was an ouch moment.  It took some work, but thankfully, she is a resident this year...and just that saved us around 20K in tuition!  She also landed some great grants this year as well.

Another thing that hit us hard is the massive increase in rents.  We did NOT expect that while planning a few years back.  So it isn't just tuition to worry about these days.  The days of "cheap rent", even for college students, are long gone.

Carolinas are being discussed but out of state is really high.

How did you get in state qualified?

[Turtle]

Hopefully, they all avoid falling for mates with a mountain of student debt too.  That's the hurdle you can't plan for.  ;)

My brother graduated with no student debt, but they're still paying on his wife's even though all 3 of their kids are now college age also.

[ixtap]

Hopefully, they all avoid falling for mates with a mountain of student debt too.  That's the hurdle you can't plan for.  ;)

My brother graduated with no student debt, but they're still paying on his wife's even though all 3 of their kids are now college age also.

My SIL is still paying and her kid is 30.

[farmecologist]

Oh dear lord.  Mine are 10/12 and reading the college stories is just ratcheting up my anxiety.  It was bad when we started planning 10 years ago, is worse right now, I don’t even want to think about what college will be costing in another 10 years.  I keep thinking that it can’t get any worse…then it does!

In state tuition at a number of NC universities is reasonable.  If you are FI or close to it, move near one of them in time for them to qualify for in-state tuition.

Interesting you mention NC universities.   Yes...they are reasonable for in state residents, as you mentioned. 

My daughter attends grad school at Chapel Hill and wasn't a resident her first year....that was an ouch moment.  It took some work, but thankfully, she is a resident this year...and just that saved us around 20K in tuition!  She also landed some great grants this year as well.

Another thing that hit us hard is the massive increase in rents.  We did NOT expect that while planning a few years back.  So it isn't just tuition to worry about these days.  The days of "cheap rent", even for college students, are long gone.

Carolinas are being discussed but out of state is really high.

How did you get in state qualified?

Well...our daughter moved to NC to attend grad school in early August, 2022.  In the meantime, we moved her car title to NC, got her a NC license, she got a job in NC, etc...  She is also files taxes as a "single filer, non-dependent".

Now that she has been in NC for a year+, and has the major prerequisites taken care of, she applied for residency status via https://www.ncresidency.org/.

Here is the kicker though...being a college student ( even a grad student ) isn't enough.  You also have to "prove that you won't leave NC" after graduation.  All of the above helped her "prove" that.

To be honest, I was more than a bit skeptical that her NC residency status would be accepted...but it was.  And it will save her 20K in tuition costs for this year.  I don't think it would have worked if she was an undergrad student.

BTW - Because of all these hoops to jump through, this is why some recommend relocating to NC at least a year before your kid attends college.  That way, the entire family become NC residents.  Obviously not practical to do that for the vast majority of people.

 

[tooqk4u22]

Oh dear lord.  Mine are 10/12 and reading the college stories is just ratcheting up my anxiety.  It was bad when we started planning 10 years ago, is worse right now, I don’t even want to think about what college will be costing in another 10 years.  I keep thinking that it can’t get any worse…then it does!

In state tuition at a number of NC universities is reasonable.  If you are FI or close to it, move near one of them in time for them to qualify for in-state tuition.

Interesting you mention NC universities.   Yes...they are reasonable for in state residents, as you mentioned. 

My daughter attends grad school at Chapel Hill and wasn't a resident her first year....that was an ouch moment.  It took some work, but thankfully, she is a resident this year...and just that saved us around 20K in tuition!  She also landed some great grants this year as well.

Another thing that hit us hard is the massive increase in rents.  We did NOT expect that while planning a few years back.  So it isn't just tuition to worry about these days.  The days of "cheap rent", even for college students, are long gone.

Carolinas are being discussed but out of state is really high.

How did you get in state qualified?

Well...our daughter moved to NC to attend grad school in early August, 2022.  In the meantime, we moved her car title to NC, got her a NC license, she got a job in NC, etc...  She is also files taxes as a "single filer, non-dependent".

Now that she has been in NC for a year+, and has the major prerequisites taken care of, she applied for residency status via https://www.ncresidency.org/.

Here is the kicker though...being a college student ( even a grad student ) isn't enough.  You also have to "prove that you won't leave NC" after graduation.  All of the above helped her "prove" that.

To be honest, I was more than a bit skeptical that her NC residency status would be accepted...but it was.  And it will save her 20K in tuition costs for this year.  I don't think it would have worked if she was an undergrad student.

BTW - Because of all these hoops to jump through, this is why some recommend relocating to NC at least a year before your kid attends college.  That way, the entire family become NC residents.  Obviously not practical to do that for the vast majority of people.

 

Grad student element is a key factor, can't really do all those things as an undergrad.   Thanks for replying.

You're right that the only way to do it otherwise is to move to the state a year earlier, but that's not really practical.

[ixtap]

DH had a meeting with his new upper management yesterday. One of the first questions was why he is part time and is he dissatisfied with Megacorp (health and no, not in the least). When DH said that he would like to be part time and remote for the foreseeable future, new guy assured him he shouldn't expect any changes. It really sounds like the outgoing folks and DH's mentor have fully impressed on incoming management how much they value DH, even now that he has been part time and remote for a little over a year.

DH is also sharing with anyone who will listen how much better he is feeling these days. Once I get over my current health issue and can get back to my exercise routine, I am expecting a pretty awesome Fall and Winter. Hopefully, over the next 13 months we can do the things we came to this lovely corner of the world to do and actually be the sober sailors we aspire to be, rather than holed up and spending like drunken sailors. To be clear: the only folks more sober than us are actual teetotalers, it is the sailing we have been missing the mark on.

[ATtiny85]

Hopefully, they all avoid falling for mates with a mountain of student debt too.  That's the hurdle you can't plan for.  ;)

My brother graduated with no student debt, but they're still paying on his wife's even though all 3 of their kids are now college age also.

My SIL is still paying and her kid is 30.

We might need a "Don't Payoff Your Student Loans" thread. Assuming low interest rates, this is similar to a mortgage and the clear path to FI.

[farmecologist]

Hopefully, they all avoid falling for mates with a mountain of student debt too.  That's the hurdle you can't plan for.  ;)

My brother graduated with no student debt, but they're still paying on his wife's even though all 3 of their kids are now college age also.

My SIL is still paying and her kid is 30.

We might need a "Don't Payoff Your Student Loans" thread. Assuming low interest rates, this is similar to a mortgage and the clear path to FI.

True.  Now that interest accrual dropped, we have already paid off our kids higher interest loans.  The only ones left are at 2.75%.  The interest really adds up fast on the higher rate loans!  A couple of the larger ones were over 7%...
 

[Much Fishing to Do]

Hopefully, they all avoid falling for mates with a mountain of student debt too.  That's the hurdle you can't plan for.  ;)

My brother graduated with no student debt, but they're still paying on his wife's even though all 3 of their kids are now college age also.

My SIL is still paying and her kid is 30.

We might need a "Don't Payoff Your Student Loans" thread. Assuming low interest rates, this is similar to a mortgage and the clear path to FI.

Heh, Well, the don't pay off your mortgage versus pay off your mortgage always seemed like quite an insignificant wash to me so I never really took a side.  But that would change if there was some hope of me being forgiven of my entire mortgage balance at some point....

[Much Fishing to Do]

Oh dear lord.  Mine are 10/12 and reading the college stories is just ratcheting up my anxiety.  It was bad when we started planning 10 years ago, is worse right now, I don’t even want to think about what college will be costing in another 10 years.  I keep thinking that it can’t get any worse…then it does!

In state tuition at a number of NC universities is reasonable.  If you are FI or close to it, move near one of them in time for them to qualify for in-state tuition.

Interesting you mention NC universities.   Yes...they are reasonable for in state residents, as you mentioned. 

My daughter attends grad school at Chapel Hill and wasn't a resident her first year....that was an ouch moment.  It took some work, but thankfully, she is a resident this year...and just that saved us around 20K in tuition!  She also landed some great grants this year as well.

Another thing that hit us hard is the massive increase in rents.  We did NOT expect that while planning a few years back.  So it isn't just tuition to worry about these days.  The days of "cheap rent", even for college students, are long gone.

Carolinas are being discussed but out of state is really high.

How did you get in state qualified?

Well...our daughter moved to NC to attend grad school in early August, 2022.  In the meantime, we moved her car title to NC, got her a NC license, she got a job in NC, etc...  She is also files taxes as a "single filer, non-dependent".

Now that she has been in NC for a year+, and has the major prerequisites taken care of, she applied for residency status via https://www.ncresidency.org/.

Here is the kicker though...being a college student ( even a grad student ) isn't enough.  You also have to "prove that you won't leave NC" after graduation.  All of the above helped her "prove" that.

To be honest, I was more than a bit skeptical that her NC residency status would be accepted...but it was.  And it will save her 20K in tuition costs for this year.  I don't think it would have worked if she was an undergrad student.

BTW - Because of all these hoops to jump through, this is why some recommend relocating to NC at least a year before your kid attends college.  That way, the entire family become NC residents.  Obviously not practical to do that for the vast majority of people.

 

Grad student element is a key factor, can't really do all those things as an undergrad.   Thanks for replying.

You're right that the only way to do it otherwise is to move to the state a year earlier, but that's not really practical.

Hmmm.  So many kids are taking that "gap" year now maybe we've found a good use for that year...

[ATtiny85]

Hopefully, they all avoid falling for mates with a mountain of student debt too.  That's the hurdle you can't plan for.  ;)

My brother graduated with no student debt, but they're still paying on his wife's even though all 3 of their kids are now college age also.

My SIL is still paying and her kid is 30.

We might need a "Don't Payoff Your Student Loans" thread. Assuming low interest rates, this is similar to a mortgage and the clear path to FI.

Heh, Well, the don't pay off your mortgage versus pay off your mortgage always seemed like quite an insignificant wash to me so I never really took a side.  But that would change if there was some hope of me being forgiven of my entire mortgage balance at some point....

LOL, yeah that’s a good point. The (possible) forgiving of student loans is such an unbelievable sack of shit that it didn’t even enter my mind.

[Taran Wanderer]

It's interesting how articles about wealth typically make some blanket statement about how older people have more wealth.  So here's an article that at least breaks things out by age, but it is only looking at broad averages.  Mustachians or even aspiring mustachians must surely beat this in all categories.

https://finance.yahoo.com/news/high-americans-net-worth-every-144235574.html

Here's the average by age range.  note that the source of most of this wealth is real estate (primary residence).

• Under 35: $30,500
• Age 35 – 44: $126,900
• Age 45 – 54: $186,000
• Age 55 – 64: $276,000
• Age 65 – 69: $341,400
• Ages 70+: $373,900

Sure, the numbers get bigger with age, but sadly it's kind of depressing.

[SwordGuy]

It's interesting how articles about wealth typically make some blanket statement about how older people have more wealth.  So here's an article that at least breaks things out by age, but it is only looking at broad averages.  Mustachians or even aspiring mustachians must surely beat this in all categories.

https://finance.yahoo.com/news/high-americans-net-worth-every-144235574.html

I've found this site to be quite useful for net worth and income stats, plus others.

https://personalfinancedata.com/networth-percentile-calculator/

[Taran Wanderer]

I've found this site to be quite useful for net worth and income stats, plus others.

https://personalfinancedata.com/networth-percentile-calculator/

Nice.  Thanks.

[Fomerly known as something]

In the paying it forward category.  I showed a coworker where he can change his TSP contribution to max it out.  I also mentioned how HQ will send out an E-mail before January with the amount to max out next year.

[SwordGuy]

I've found this site to be quite useful for net worth and income stats, plus others.

https://personalfinancedata.com/networth-percentile-calculator/

A $2M net worth puts a household (based on 2019 data) in the 93.7th percentile.   Top 7% of wealth in the US.
A $3M net worth ranks 95.6th percentile, or top 5%.
A $4M net worth ranks 96.5th percentile, or top 4%.

[Dicey]

Fun calculator. The problem with living in a HCOLA is that everybody has crap tons of money.

[ATtiny85]

In the paying it forward category.  I showed a coworker where he can change his TSP contribution to max it out.  I also mentioned how HQ will send out an E-mail before January with the amount to max out next year.

Excellent. I had two employees who during general conversations mentioned that they did not know there was even a limit for 401k. I think their there is confusion sometimes with comments about "contribute enough to get the max match" or maybe "save 10%", and the rest of the system is ignored. I knew back in the 90s when I did not have a 401k that the max IRA was $2000, but I don't think I knew what the max 401k was when I started at megacorp in 2000. Just glossed over in the literature, probably assumed it was for the "rich peple".

[EscapeVelocity2020]

When I was just starting out, contributing the max to a 401k was a tremendous burden (needed an emergency fund, rent, and food!) and the tax deferral did not impact my income taxes significantly.  Now that I’m well off and the income tax deferral is significant, maxing out is super easy, barely an inconvenience…. Very ironic.  The choices I made back then had a lot more impact than what I do now, in terms of FI.

[Dancin'Dog]

I've found this site to be quite useful for net worth and income stats, plus others.

https://personalfinancedata.com/networth-percentile-calculator/

A $2M net worth puts a household (based on 2019 data) in the 93.7th percentile.   Top 7% of wealth in the US.
A $3M net worth ranks 95.6th percentile, or top 5%.
A $4M net worth ranks 96.5th percentile, or top 4%.

I didn't really understand the age range function at first glance.  After wondering about it for a bit, I put my daughter's age (25) in and realized that  $1M places her in the 100% ranking.  $1M for me (59) would only be ranked at 82.68%.


After fiddling with the settings I realized she only needs $270,000 to be at 100%.  I was shocked to realize $270,000 still ranks a 59 y/o at 58.7%. 


It was interesting to adjust the age range to 30, 40, etc. to see how the $270K ranks for various ages. 


I'll have to share the link with my daughter.  She's always had a competitive spirit.  This should help her determine how well she's doing compared to her peers. 

[2KidFIRE]

When I was just starting out, contributing the max to a 401k was a tremendous burden (needed an emergency fund, rent, and food!) and the tax deferral did not impact my income taxes significantly.  Now that I’m well off and the income tax deferral is significant, maxing out is super easy, barely an inconvenience…. Very ironic.  The choices I made back then had a lot more impact than what I do now, in terms of FI.

Wow, wow, wow, wow, wow...... wow!  It's always interesting to look back and see how choice you made 5, 10, 15, 20 years ago (while challenging at the time) really paid off for current-you :)

[farmecologist]

When I was just starting out, contributing the max to a 401k was a tremendous burden (needed an emergency fund, rent, and food!) and the tax deferral did not impact my income taxes significantly.  Now that I’m well off and the income tax deferral is significant, maxing out is super easy, barely an inconvenience…. Very ironic.  The choices I made back then had a lot more impact than what I do now, in terms of FI.

Wow, wow, wow, wow, wow...... wow!  It's always interesting to look back and see how choice you made 5, 10, 15, 20 years ago (while challenging at the time) really paid off for current-you :)

Yep it sure is!

We tried very, very hard to always max out our 401k's even though it made us very cash poor starting out.  However, we were mostly successful and have been maxing them out for decades now.  We just couldn't pass up the "immediate gain" of the tax deferral. 

Fast forward to today and we are sitting pretty!  Things have been a little discouraging lately though in terms of growth, but we survived the 2008-2009 crash, and all the other crashes and dips since then, so we can certainly survive this.

I guess the point is that it really can take decades of planning for "average working joes" like ourselves to make the double commas club ( and eventually make it to this thread ).  And we have good, professional, jobs.  It is orders of magnitude harder for those with lower income, and we are well aware of that...with many examples of family and friends that definitely won't make it.  However, that is a topic for another discussion.  Far too many of the "won't make its" were buying "all the toys" while younger while we were cash poor and "suffering"...but were stashing away a boatload.

But that was back in the day, when many had the opportunity to save, but blew it.  Unfortunately, the "start saving early" mantra, much less maxing out a 401k, just isn't doable for many younger folks these days, for many reasons.  I'm seeing the struggle with my own kids and their peers.  That is why we are helping out our kids as much as possible.  We will likely get them both out of college this year with no student debt ( see discussion above ), which we hope will be a great "kick start" into the real world, but time will tell.   We have also taught them to be frugal, so that should help as well.

[Monocle Money Mouth]

When I was just starting out, contributing the max to a 401k was a tremendous burden (needed an emergency fund, rent, and food!) and the tax deferral did not impact my income taxes significantly.  Now that I’m well off and the income tax deferral is significant, maxing out is super easy, barely an inconvenience…. Very ironic.  The choices I made back then had a lot more impact than what I do now, in terms of FI.

Wow, wow, wow, wow, wow...... wow!  It's always interesting to look back and see how choice you made 5, 10, 15, 20 years ago (while challenging at the time) really paid off for current-you :)

Maxing out your 401(k) is tight!

[achvfi]

I've found this site to be quite useful for net worth and income stats, plus others.

https://personalfinancedata.com/networth-percentile-calculator/

A $2M net worth puts a household (based on 2019 data) in the 93.7th percentile.   Top 7% of wealth in the US.
A $3M net worth ranks 95.6th percentile, or top 5%.
A $4M net worth ranks 96.5th percentile, or top 4%.

If these are 2019 numbers, my guess is networth numbers should have gone up by 40-50% in last 3-4 years for a typical person.

[2sk22]

When I was just starting out, contributing the max to a 401k was a tremendous burden (needed an emergency fund, rent, and food!) and the tax deferral did not impact my income taxes significantly.  Now that I’m well off and the income tax deferral is significant, maxing out is super easy, barely an inconvenience…. Very ironic.  The choices I made back then had a lot more impact than what I do now, in terms of FI.

The $2500 that it cost us to buy our first shares of the S&P in our taxable brokerage account back in 1993 is now worth about $15000 now (I'm not including all the reinvested dividends over the years).

We aren't really good at thinking about exponential curves - It takes a long time to see the effects of compounding but when you finally do, it's pretty mind boggling. I keep showing my wife my weekly spreadsheet update but she says that she just cannot believehow big the numbers have gotten!

[Fomerly known as something]

When I was just starting out, contributing the max to a 401k was a tremendous burden (needed an emergency fund, rent, and food!) and the tax deferral did not impact my income taxes significantly.  Now that I’m well off and the income tax deferral is significant, maxing out is super easy, barely an inconvenience…. Very ironic.  The choices I made back then had a lot more impact than what I do now, in terms of FI.

Wow, wow, wow, wow, wow...... wow!  It's always interesting to look back and see how choice you made 5, 10, 15, 20 years ago (while challenging at the time) really paid off for current-you :)

Maxing out your 401(k) is tight!

I learned to get off my high horse about maxing out immediately, and focus on adding 1% each pay raise until you get to 10% then switch to a dollar amount (we can do either but only get the match for each pay period we contribute).  Our early employees often get 2 raises a year, an overall increase in January and a step or grade increase on their hiring anniversary.  Increase is generally at least 3%.  (Government employment so set rules).  This leads to maxing out w/in 5-6 years if they don’t come up with an excuse.

[EscapeVelocity2020]

When I was just starting out, contributing the max to a 401k was a tremendous burden (needed an emergency fund, rent, and food!) and the tax deferral did not impact my income taxes significantly.  Now that I’m well off and the income tax deferral is significant, maxing out is super easy, barely an inconvenience…. Very ironic.  The choices I made back then had a lot more impact than what I do now, in terms of FI.

Wow, wow, wow, wow, wow...... wow!  It's always interesting to look back and see how choice you made 5, 10, 15, 20 years ago (while challenging at the time) really paid off for current-you :)

Maxing out your 401(k) is tight!

Ryan George fans here I see, nice 👍🏻

[Taran Wanderer]

Question…

We’re looking at a real estate opportunity, but in order to do it, it needs to be all cash, and it’s more cash than we have. We’re looking at pulling contributions (not gains) from our Roth IRAs. That works find for the contributions from years ago, but the last several years have been backdoor post-tax contributions into a conventional IRA that were then rolled over into the Roth. Does anyone know if those can be extracted tax free like the direct Roth contributions?

[secondcor521]

Question…

We’re looking at a real estate opportunity, but in order to do it, it needs to be all cash, and it’s more cash than we have. We’re looking at pulling contributions (not gains) from our Roth IRAs. That works find for the contributions from years ago, but the last several years have been backdoor post-tax contributions into a conventional IRA that were then rolled over into the Roth. Does anyone know if those can be extracted tax free like the direct Roth contributions?

Those are conversions.  They are tax free and penalty free as long as it has been five tax years since the conversions.  So currently any conversions you did in 2018 or earlier can be extracted tax free.  If you're under 59.5, you'll need to complete Part III of Form 8606.  Pay particular attention to line 24 of that form.

[Taran Wanderer]

Okay, that makes sense given the other rules around withdrawals of earnings. Thank you!

[2sk22]

There have been some big swings in the market this year - I was just looking at a spreadsheet where I track our NW. From mid July to the end of October, we had a decrease of almost 7% but much of that has already been reversed in just the past week! I did a big rebalance in March and haven't changed our asset allocation since then. Anyone else seeing big swings?

[Dicey]

There have been some big swings in the market this year - I was just looking at a spreadsheet where I track our NW. From mid July to the end of October, we had a decrease of almost 7% but much of that has already been reversed in just the past week! I did a big rebalance in March and haven't changed our asset allocation since then. Anyone else seeing big swings?

This "Anyone" freely admits she's not really paying attention. It's so unlikely that we'll ever run out of funds that I just don't worry about it any more.

[secondcor521]

There have been some big swings in the market this year - I was just looking at a spreadsheet where I track our NW. From mid July to the end of October, we had a decrease of almost 7% but much of that has already been reversed in just the past week! I did a big rebalance in March and haven't changed our asset allocation since then. Anyone else seeing big swings?

This "Anyone" freely admits she's not really paying attention. It's so unlikely that we'll ever run out of funds that I just don't worry about it any more.

I watch and notice, but I only keep track of current NW and historical points where NW or assets hit a milestone number.  Over the longer haul - for me since summer 2006 - I keep hitting milestone numbers.  I've been retired about half of that time frame, and the numbers still have gone up.

I do think that with the advent of the 24-hour news cycle and the proliferation of data, we've become less inclined to take the long view.  News stories with statistics like "the lowest mortgage rates in 3 weeks" or "the worst day for the S&P since June" or "the best week for stocks since 2021" encourage this view.  When I was growing up and learning about investing, a typical investment timeframe was five years at a minimum.  Hardly anyone talks like that any more; I think more of us should.

I watch CNBC for fun, but pretty much zero percent of it is actionable, and I don't think I've ever actually made a financial decision based at all on anything they've said.  I also haven't made any decisions since retiring based on what the economy is doing or what the Fed is saying.  Some here do; I think to their detriment but that is almost a philosophical question about active vs. passive which will continue forever here and elsewhere.

Like Dicey, I'm at a low enough WR% now that it simply doesn't matter.  Which is a practical reason for me to not really care too much.  I used to care in order to maximize the legacy for my three kids, but even that now is unnecessary because they are all earning their own way in the world and what I leave them will be just some large measure of gravy.

[ixtap]

We only add it up and rebalance twice a year when RSUs generally mean a large contribution to our taxable accounts (at least, they did before going part time). I have noticed bond funds are still generally slipping and stocks have had a wild ride.

It has been a weird year for us anyway. At the beginning of the year we were convinced we were ready to spend big and put a deposit on a new boat for delivery in 2025 or 2026 and cashed out that anount. I am sure we would have been perfectly happy with that boat, but after having a chance to view one, we realized there are still a lot of compromises and we might as well keep the one we have for now. Rather than just putting the lump sum back into taxable, we upped the 401k/MBR contributions and have been trickling it back in at all those different prices, many of them higher than what we sold at. Still better for the portfolio than actually spending the money, though. Now we have to decide whether to sell from taxable to make use of the MBR next year or not. Talk about first world problems!

[Bateaux]

According to Mint we're at an all time personal highpoint.  If you toss in real estate, we've reached beyond territory.
I bought a new bicycle a month ago. Probably taking it out for it's first voyage tomorrow. Paid about $3000 for it and accessories. I actually sweated buying it. WTF was I thinking.

[ixtap]

According to Mint we're at an all time personal highpoint.  If you toss in real estate, we've reached beyond territory.
I bought a new bicycle a month ago. Probably taking it out for it's first voyage tomorrow. Paid about $3000 for it and accessories. I actually sweated buying it. WTF was I thinking.

I noticed that the market is close to when we did our last pre crash snapshot and we have probably saved an amount about equal to bond fund losses since then, so between dividends and interest we are probably up as well.

But our habits haven't really changed and my fears and anxiety around money have significantly dulled, but not disappeared. I get it.

[Taran Wanderer]

Yeah, we’ve seen the wild swing down and back up. Our regular contributions bought some “on sale” shares.

[thedigitalone]

Officially made it into the $2M liquid club this week, goal is $2.5 so getting closer!

[Dicey]

Officially made it into the $2M liquid club this week, goal is $2.5 so getting closer!

Congratulations!

[EscapeVelocity2020]

I haven’t paid super close attention to NW this year, but my QQQ is apparently up 45% this year!  I have it in a Roth account and sometimes wonder how it’s possible for so much money to be made by so many tech employees.  I’ve had it for so long that I forgot about it, but being up over 1000% it is becoming a substantial part of my NW…. The compounding is bonkers.