Author Topic: Is it even possible at my age?  (Read 6751 times)

Metalcat

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Re: Is it even possible at my age?
« Reply #50 on: March 09, 2021, 07:17:27 PM »
When it comes to your spouse, the key to financial matters is the same as for any relationship matters, it all comes down to communication.

It's not about convincing your spouse to give up their Starbuck's habit and start buying clothes from thrift shops, it's about making sure that the two of you are aligned in terms of dreams and goals.

Do you two have a solid sense of what future you are building together? Do you both thoroughly understand what that future will cost both in terms of finances, but also years of work? Do you both understand the opportunity cost of money spent today vs money saved today?

Never ever go into a conversation with your spouse assuming that you hold the answers to how they should behave, which is exactly what you would be doing if you tried to tell them to spend less. Instead, invest the time and energy to thoroughly understand your partner's hopes and dreams, and work together to improve your collective knowledge of personal finance as a powerful tool for getting what you want and living your best life.

I had all sorts of ideas when I first encountered MMM, because I'm the money person in the marriage. But it's through several years of conversations with DH that have shaped our plans, and those plans are what have guided our spending decisions, not some arbitrary financial goal that the internet told me was a good idea.

In most marriages people just spend money to never have to address any kind of real mismatch in priorities. That's fine, that's the norm. But you don't have a hope in hell of doing anything exceptional without being on the same page and working together towards a shared goal.

So hammer out your goals, and then retroactively make a financial plan from there to meet those goals.

DH and I both ended up deciding that we really don't care about FIRE and would rather put our energy towards making sure we only do work we enjoy, even if it means taking pay cuts, or taking time off to recharge. And this is after I was initially hell bent on hitting FI.

Communication first, strategic planning second.

kimura

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Re: Is it even possible at my age?
« Reply #51 on: March 09, 2021, 07:23:56 PM »
Malcat I love that post. Thank you.

10SNE1

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Re: Is it even possible at my age?
« Reply #52 on: March 09, 2021, 07:30:54 PM »
Agree with above - if only one person in a relationship is interested in a major finance overhaul then it won't work well. Communication and goal-setting with money should be worked out together. Being on the same page increases your chance of success.

Metalcat

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Re: Is it even possible at my age?
« Reply #53 on: March 09, 2021, 07:38:37 PM »
Malcat I love that post. Thank you.

You're very welcome.

It's easy to get all excited and tied up in the numbers, but money is literally nothing in and of itself. It's simply a placeholder for time and energy, so you first have to define the parameters of what you want money to be able to do for you, otherwise you're just making up numbers for yourself with no real basis and no real goal other than abstract numbers on a screen.

Also know that your goals will likely change over time. Just going through the process of figuring out what money means to you, trial and error of savings strategies, and countless talks about it with your partner, will all modulate what money means to you over time.

The early stages of this process are all about questioning your own assumptions and expectations. Enjoy the process of figuring out what spending you can cut with zero negative impact and what little luxuries are surprisingly painful to go without. That's part of how you learn what your ideal life looks like. I had no clue our life would end up looking the way it does now, but it's fantastic because it's us getting the very best bang for our buck on every cent we spend.

It's not about spending as little as possible, it's about wasting as little as possible. It takes trial and error to identify the waste.  But you can choose for the process to be fun.




RedmondStash

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Re: Is it even possible at my age?
« Reply #54 on: March 09, 2021, 07:43:32 PM »
Seconding what Malcat said so eloquently. It's not about finding ways to force your partner to change; it's about having conversations about what each of you wants, and figuring out how you can both compromise to align your goals. But your partner gets to have goals too, no matter how excited you are about your new FIRE plans.

It's never too late to take more control of your finances. And it's not too late to make a plan to FIRE -- with the caveat that to execute on that plan, you may have to make significant changes that you won't enjoy. If it were easy, everyone would do it. But the benefits are great, if you can put short-term enjoyment on hold and believe in the promise of long-term payoffs.

Metalcat

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Re: Is it even possible at my age?
« Reply #55 on: March 09, 2021, 07:52:40 PM »
Agree with above - if only one person in a relationship is interested in a major finance overhaul then it won't work well. Communication and goal-setting with money should be worked out together. Being on the same page increases your chance of success.

I would go even further than that. Not being aligned on financial goals, period, will cause damage to a relationship, regardless of whether or not one party is trying to make a change. That's why the vast majority of couples cite money as the major source of conflict in their marriage. So it's all marriages that benefit from being aligned in terms of priorities and how to achieve them financially.

I have married friends right now fighting viciously over money. The fight isn't actually about money, the fight is about having competing priorities. One partner expects the other to hustle to get a major promotion/raise and the other is dealing with burnout and feeling a lack of support from their partner. They just don't have the communication skills to be able to explore that productively, so instead they fight about money, which is nonsense, since nothing actually gets addressed.

BicycleB

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Re: Is it even possible at my age?
« Reply #56 on: March 09, 2021, 08:12:44 PM »
Wonderful comments, @Malcat. OP (original poster - that's you, @kimura!) sounds like they got into this because something has sparked the desire for a speedier retirement. Only two way communication will show what his spouse wants, and from that, maybe something great can emerge for them.

kimura

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Re: Is it even possible at my age?
« Reply #57 on: March 09, 2021, 08:48:59 PM »
This food for thought is great. I love these perspectives.

DeniseNJ

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Re: Is it even possible at my age?
« Reply #58 on: March 10, 2021, 05:28:08 AM »
I have to tell you something really important:  3 years ago I was 47, owed about 30K in cc debt, no cash, and about $350K in my 401K. I was in the same shape as you! Within 3 months I had money and I couldn't figure out where it was coming from (it was the money I wasn't spending). Now 3 yrs later I have about $700K invested, no cc debt, and 20 grand in cash. I'm retiring at 57, August 4, 2028.

Yes, yes, yes, you CAN do this!!! Go through the start here page on MMM. Realize that you are spending money on stupid stuff that you don't need and will not make you as happy as spending your days just how you want.

I looked at my cable bill and realized I was getting charged for HD and I didn't even have it--wasn't yet ready to cut the cord, although I have now and it's great. I got a new cheaper cell plan. I started turning off every light we didn't need (really makes a difference). I unsubscribed form IG and Youtube pages that made me want to buy stuff. We used to get stuff in the mail every single day! I went through each and every bill to figure out how to streamline. I started shopping at Aldi and spent HALF on groceries! Within 3 months I wrote a post here saying, "I have so much money!"

One thing I did was take out a 401K loan to pay off the cc debt, PUT A HOLD ON THE CCs so we couldn't use them NO MATTER WHAT! and started paying all of that cc payment to the 401K loan, like $2K per month. This is dangerous if you may return to your old ways but it worked for us. When the fam wanted stuff I said nope, ain't got no dough.

You don't need a budget. Read "Start Here."
https://www.mrmoneymustache.com/2013/02/22/getting-rich-from-zero-to-hero-in-one-blog-post/
Then start at the first MMM article and read them all. Stop spending money. Tell yourself, I do NOT need that, and don't buy it. Get creative and do without. You will see the result in just MONTHS, not years. You got this!!!

kimura

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Re: Is it even possible at my age?
« Reply #59 on: March 10, 2021, 06:17:28 AM »
YES!
*Virtual hug*

UnleashHell

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Re: Is it even possible at my age?
« Reply #60 on: March 10, 2021, 08:35:44 AM »
at your age I found mmm. had a lower net worth but not too far out from yours
at 49 I hit a lean fire number and just about quit. then got slapped with divorce instead at 50 (happy birthday to me!!)
I started over with a lot of debt , child support for 3 year, alimony and 2 mortgages on a house I no longer owned. (I took the debt and kept most of the 401k)
at 53 I'm on the cusp of FIRE again with a huge increase in net worth and assets in the 3 1/2 years since I divorced despite losing 1/2 my net worth and paying out a shed load of cash every month.

My mortgages are now just on my house and a townhouse I rent out.
my investments will pay for everything else.

You are on a firmer footing than I was (I just didn't realize it at the time!!)


So is it possible?? yes. twice for me from your age to early retirement.

can you do it?

well - now its in your hands.
shape your own future. Its yours to mold.

kimura

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Re: Is it even possible at my age?
« Reply #61 on: March 10, 2021, 08:50:22 AM »
Ugh sorry to hear about your divorce. I've been there and know its painful.

Thanks for the encouraging words. Its good to hear from people in similar situations as myself.

kimura

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Re: Is it even possible at my age?
« Reply #62 on: March 10, 2021, 01:02:15 PM »
MMM just saved me $2000 a year on my auto insurance! I was reading the blog and he suggested shopping around. An hour later I went from having USAA to Geico and and my 6 month premium dropped 1K with nearly the same coverages. WOW. More money to put towards my emergency fund.

jeroly

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Re: Is it even possible at my age?
« Reply #63 on: March 10, 2021, 02:43:02 PM »
MMM just saved me $2000 a year on my auto insurance! I was reading the blog and he suggested shopping around. An hour later I went from having USAA to Geico and and my 6 month premium dropped 1K with nearly the same coverages. WOW. More money to put towards my emergency fund.
That's great work!  You're already on your way to reaching FIRE faster.

Once you have an emergency fund built up, you can raise your deductibles or drop your collision and/or comprehensive coverages to save even more dough.  The math on car insurance is that your expected payback from each insurance dollar is around 60 cents - the difference goes to administrative costs and profit.  So it's definitely not adviseable from a financial standpoint to buy more than you need to.  When you don't have an emergency fund you need a low deductible because paying out, for example, $1,000 every few years would be a big burden - but if you've already saved it up you're in position to take that winning (on average) bet.

kimura

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Re: Is it even possible at my age?
« Reply #64 on: March 10, 2021, 04:19:24 PM »
I've never heard that reasoning before but I like it.

BicycleB

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Re: Is it even possible at my age?
« Reply #65 on: March 10, 2021, 05:46:51 PM »
Way to go on the car insurance, Kimura!

DeniseNJ

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Re: Is it even possible at my age?
« Reply #66 on: March 11, 2021, 06:36:39 AM »
MMM just saved me $2000 a year on my auto insurance! I was reading the blog and he suggested shopping around. An hour later I went from having USAA to Geico and and my 6 month premium dropped 1K with nearly the same coverages. WOW. More money to put towards my emergency fund.

This is what I'm talking about! Now go through all of your bills.  Make sure you're getting what you're paying for and think about what you can do without. Shop around for cell phone coverage, cable, internet, other insurance. Within just a few months you'll have extra cash with no change whatsoever in your lifestyle. Once you start actually making changes you'll be shocked at how much money you have. It's a snow ball.

Oh, be sure you are getting all of the Geico discounts. Tell them that you own Berkshire Hathaway stock in a mutual fund for an extra discount--you probably do.

kimura

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Re: Is it even possible at my age?
« Reply #67 on: March 11, 2021, 08:16:00 AM »
They give a discount for that?

I be given myself a goal of 12 financial books to read by end of year. Iím halfway through my first.

Your Money Or Your Life by Vicki Robin.

Next will be The Simple Path to Wealth by JL Collins.

Any other must haves?


CodingHare

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Re: Is it even possible at my age?
« Reply #68 on: March 11, 2021, 08:22:27 AM »
The Boglehead's Guide to Investing is the classic argument for the three fund portfolio MMM uses.

The Life Changing Magic of Tidying Up by Marie Kondo - Almost overrated, but it really is about developing a new relationship with stuff, learning to evualate what stuff should remain in your life, and how to evaluate buying new stuff.  Also a massively quick read.


kimura

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Re: Is it even possible at my age?
« Reply #69 on: March 11, 2021, 08:24:17 AM »
Despite my poor financial planning Iím actually very organized with everything. Iíve been using a custom excel spreadsheet to track bills for years and I know exactly what our monthly and annual bills are. My credit is excellent and no debt other than car and mortgage. I hate credit card debt. So I make sure to pay balances off monthly. Hence good credit.

I just opened an Amazon card that came with $150 gift card and 5% on purchases and will be used exclusively for Amazon.  Free money. Iíve also decided to use our Costco card for all our gas purchases for the 4%. The stimulus check and our tax refund are going into two Roth IRAs with VTSAX at 6k each. Instant emergency fund and instant investment. Paying myself first. Iím feeling good. Better than when I made this thread.
« Last Edit: March 11, 2021, 08:29:51 AM by kimura »

kimura

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Re: Is it even possible at my age?
« Reply #70 on: March 11, 2021, 08:25:54 AM »
The Boglehead's Guide to Investing is the classic argument for the three fund portfolio MMM uses.

The Life Changing Magic of Tidying Up by Marie Kondo - Almost overrated, but it really is about developing a new relationship with stuff, learning to evualate what stuff should remain in your life, and how to evaluate buying new stuff.  Also a massively quick read.

Yup there are two Boglehead books I was considering. The second book you mentioned almost sound like the one Iím currently reading. Iíll check it out. Thanks!

DeniseNJ

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Re: Is it even possible at my age?
« Reply #71 on: March 11, 2021, 10:34:13 AM »
They give a discount for that?

I be given myself a goal of 12 financial books to read by end of year. Iím halfway through my first.

Your Money Or Your Life by Vicki Robin.

Next will be The Simple Path to Wealth by JL Collins.

Any other must haves?

Yes, they do It's some sort of associates discount.  Call them right away.
Also, I hope you are taking those books out of the library and not buying them. You can go to JL Collins website too and read his stock series.

lollylegs

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Re: Is it even possible at my age?
« Reply #72 on: March 11, 2021, 11:26:21 AM »
Yes, you absolutely can do this! 
In 2010 we owed over $100,000 cc debt & student loans, we were close to losing our home & I'd lost my job. 2021 - NW >1,000,000, on track to retire 2022, earning average wages (Australia). How fast you do it will depend on your savings rate and how much you want to cut back on spending. My suggestion is to read the Don't Pay off Your Mortgage thread.

kimura

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Re: Is it even possible at my age?
« Reply #73 on: March 11, 2021, 11:29:38 AM »
WOW that so awesome! Im totally happy and excited for you. Thanks for the tip. I will definitely check that thread out.

PDXTabs

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Re: Is it even possible at my age?
« Reply #74 on: March 11, 2021, 11:47:36 AM »
47(M).
Married. 2 Kids (15 and 7).
401k around 410k.
Mortgage 360K with 200k equity.

Of course you can, your assets are pretty close to my goal for my 46.5 year old self, although to be completely honest you have more child related expenses than I will at that point in my life.

Catbert

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Re: Is it even possible at my age?
« Reply #75 on: March 12, 2021, 10:04:28 AM »
I'll add to your list of things to do:  figure out what you are able/willing to do for your children with regard to college.  After figuring that out with you spouse, clearly communicate it to your 15 year old.  One way to derail early retirement is children going to expensive universities.  You can pretty quickly spend 50K x 4 years x 2 children.  Or they could go to community college for 2 years while living at home and then transferring.  Or earning community college credits while in high school.  Or lots of things.  The time to calibrate expectations is now

CodingHare

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Re: Is it even possible at my age?
« Reply #76 on: March 12, 2021, 10:28:33 AM »
I'll add to your list of things to do:  figure out what you are able/willing to do for your children with regard to college.  After figuring that out with you spouse, clearly communicate it to your 15 year old.  One way to derail early retirement is children going to expensive universities.  You can pretty quickly spend 50K x 4 years x 2 children.  Or they could go to community college for 2 years while living at home and then transferring.  Or earning community college credits while in high school.  Or lots of things.  The time to calibrate expectations is now

I cannot recommend the 2 year community college and transfer route enough!  I ended up changing my major halfway through, ended up with extra classes because I needed to take ones that matched my final major.  It would have been twice as expensive to learn that going to the four year institution.

Also it's a good test ground for whether college is right for your kids.  It was for me, but there were plenty of people I knew who dropped out of the two year program for various reasons (Discovered they liked the trades better, health issues, etc).  Better to find that out at the relatively cheap level.

robartsd

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Re: Is it even possible at my age?
« Reply #77 on: March 12, 2021, 01:04:16 PM »
I cannot recommend the 2 year community college and transfer route enough!  I ended up changing my major halfway through, ended up with extra classes because I needed to take ones that matched my final major.  It would have been twice as expensive to learn that going to the four year institution.

Also it's a good test ground for whether college is right for your kids.  It was for me, but there were plenty of people I knew who dropped out of the two year program for various reasons (Discovered they liked the trades better, health issues, etc).  Better to find that out at the relatively cheap level.
I think 2 year community colleges are a great resource for the majority of students. There certainly are some specialized programs where getting into the program from freshmen year is very helpful; but that starts off the assumption that you know you want to complete that specific program. Some of my community college classes even had students who were already attending the local university, but they found taking the course at the community college and transferring the credits was the better path (not sure if that was availability, cost, or both).

PDXTabs

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Re: Is it even possible at my age?
« Reply #78 on: March 12, 2021, 01:06:41 PM »
I'll add to your list of things to do:  figure out what you are able/willing to do for your children with regard to college.  After figuring that out with you spouse, clearly communicate it to your 15 year old.  One way to derail early retirement is children going to expensive universities.  You can pretty quickly spend 50K x 4 years x 2 children.  Or they could go to community college for 2 years while living at home and then transferring.  Or earning community college credits while in high school.  Or lots of things.  The time to calibrate expectations is now

I cannot recommend the 2 year community college and transfer route enough!  I ended up changing my major halfway through, ended up with extra classes because I needed to take ones that matched my final major.  It would have been twice as expensive to learn that going to the four year institution.

Also it's a good test ground for whether college is right for your kids.  It was for me, but there were plenty of people I knew who dropped out of the two year program for various reasons (Discovered they liked the trades better, health issues, etc).  Better to find that out at the relatively cheap level.

Yup, in my experience the teaching at my local CC is actually better than the lower division instruction at the closest state university. Dual enrollment/transfer is the best of both worlds baring some fancy private teaching institution.

kimura

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Re: Is it even possible at my age?
« Reply #79 on: March 12, 2021, 01:52:54 PM »
Like most 15 year olds my son doesn't know if he want to go to college. If he goes it would definitely ne CC first. He has expressed interest in coding and loves the coding classes he has taken in HS this year.

Exflyboy

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Re: Is it even possible at my age?
« Reply #80 on: March 12, 2021, 03:26:04 PM »
Throwing my "log on the fire" here..

DW and I were at $zero net worth at age 43.. I.e our house was paid off and worth roughly what we paid for it but no other savings to speak of.

Our income was about $75k at age 43, rising to around $150k before I quit, but our income did not crack $100k until my late 40's.

I quit work at age 52 with about $1.3million in 401k and after tax investments.

Its all a question of how bad you want this.. Needless to say we were pretty damn frugal. Never sent a car to a mechanic, doubled the size of our house with our own bare hands while working full time etc etc.

Our only advantage was we didn't have any kids.

Making sure you are both on the same page with respect to how frugal you want to be is the key.


dandarc

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Re: Is it even possible at my age?
« Reply #81 on: March 12, 2021, 04:01:38 PM »
I hesitate to bring this up because 9 years from nothing (except a paid off house) to $1.3 million is the real story, but "quit work" . . .

kimura

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Re: Is it even possible at my age?
« Reply #82 on: March 12, 2021, 04:15:51 PM »
Wow thatís awesome. Iíve already started progress. 529s for my kids. 2 Roth IRAs for my wife and myself. Upped contributions to 401k. Started reading. Iím determined. This thread has been reassuring. Thanks once again all!

Exflyboy

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Re: Is it even possible at my age?
« Reply #83 on: March 12, 2021, 04:22:46 PM »
I hesitate to bring this up because 9 years from nothing (except a paid off house) to $1.3 million is the real story, but "quit work" . . .

I'm missing your point I think???

simonsez

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Re: Is it even possible at my age?
« Reply #84 on: March 12, 2021, 04:27:35 PM »
I hesitate to bring this up because 9 years from nothing (except a paid off house) to $1.3 million is the real story, but "quit work" . . .
@dandarc what is it you're bringing up?

dandarc

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Re: Is it even possible at my age?
« Reply #85 on: March 12, 2021, 04:38:48 PM »
ExFlyBoy is wanted by the IRP in every jurisdiction from here to England. Just poking a little fun.

Exflyboy

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Re: Is it even possible at my age?
« Reply #86 on: March 12, 2021, 04:58:08 PM »
Ahh, yes yes.. Now I get it..

I TRIED to quit work at 52.. Just needed a few attempts..:)

PhrugalPhan

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Re: Is it even possible at my age?
« Reply #87 on: March 12, 2021, 06:03:55 PM »
I'll add my story here too.

I was married with $0 net worth at 40 (1996).  I got serious about my finances then, but in the next 10 years I (bought a house with almost no money for down payment, was unemployed for 15 months, when I finally started working again my salary was down 25%, went through a divorce, have been paying out child support to today).  Only the last 4 years has my salary gone over $100k.

I would have quit 2 years ago at 56, but I am greedy and am working to get full pension at end of 2022.  I have investments now of $1.4Mil, no mortgage, and will have a pension of $45k/year.

I too was very frugal, my house was a fixer upper and I did most of the work myself.

It can be a slog, but if you want it, it can be done.
« Last Edit: March 15, 2021, 12:12:49 PM by PhrugalPhan »

TomTX

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Re: Is it even possible at my age?
« Reply #88 on: March 14, 2021, 03:56:51 PM »
OP mentioned now doing 2x $6k Roth IRA. Good. Make sure you designate that as a 2020 contribution.

You bring home $120k a year? That's far more than I do. Mortgage is similar. Got a kid. $6k property taxes. I drive a cheap car, paid $2,300 cash for it 4 years ago, just routine maintenance since (mostly done myself - fuel filter, brake pads.)

In 2020 I contributed $19,500 to the 401k, pus $19,500 to the 457, plus 2x$6000 IRA contributions.

I'll be doing it again in 2021 (457 will be maxed April 1).

You can do this. You should be able to max out the 401k, 2x IRA - and throw another $20k in taxable investments.

BlueHouse

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Re: Is it even possible at my age?
« Reply #89 on: March 14, 2021, 04:09:32 PM »
oh yeah.  I found MMM about 7.5 years ago when I was age 45.  At the time I  just had an accident that could have made it impossible for me to work again.  I had also recently increased my income by A LOT, and had just started increasing my expenses as well.  The accident put me on my ass for 6 weeks, during which time I did little other than read MMM and started to figure out that I didn't want to work until age 74. 

I just pulled the FIRE trigger last month (a few years before schedule, but I realized I had more  in reducing my expenses and if I really wanted to, I could succeed on less.  I wanted. 

So yes, it's very doable.  Write a case study and take the kind advice and face punches and make it happen!  Good luck!

kimura

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Re: Is it even possible at my age?
« Reply #90 on: March 14, 2021, 09:27:24 PM »
I am so encouraged!

kimura

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Re: Is it even possible at my age?
« Reply #91 on: March 14, 2021, 09:28:37 PM »
I'll add my story here too.

I was married with $0 net worth at 40 (1996).  I got serious about my finances then, but in the next 10 years I (bought a house with almost no money for down payment, was unemployed for 15 months, when I finally started working again my salary was down 25%, went through a divorce, have been paying out child support to today).  Only the last 4 years has my salary gone over $100k.

I would have quit 2 years ago at 56, but I am greedy and am working to get full pension at end of 2022.  I have investments now of $1.4Mil, no mortgage, and will have a pension of $45/year.

I too was very frugal, my house was a fixer upper and I did most of the work myself.

It can be a slog, but if you want it, it can be done.

WOW!

What are your investment types?

Much Fishing to Do

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Re: Is it even possible at my age?
« Reply #92 on: March 15, 2021, 05:26:20 AM »
Given everything you have is in a 401k and home equity, and you have no CC debt/personal loans, etc, you may work well with creating a fake scarcity for yourself.  You spend what you 'have', no more no less, so keep your hands off more and it'll force you to make the spending side of the equation work.  If you're both serious about this, set a date in the very near future (couple months? to do all the cost cutting you can up front on bills)  then max out the 401k and set up monthly auto-contributions for max IRAs (you and spousal) and you'll be saving about 25%. I bet you'll force yourself to stay in check, if you cant pull it off the Roth contributions are always there to take back but I bet you will find anohter way.

I'm near pulling the FIRE trigger but follow the same philosophy, my bimonthly paychecks (after 401k contribution) are deposited into my investment account cash allocation, not my checking account.  A direct payment is made from my investment account cash monthly into my checking account at the amount I plan to continue drawing in RE.  This way I've completely separated my spending from my salary and it helped both with keeping spending down and preparing myself for RE (cashflow-wise I'll see no difference than now)

PhrugalPhan

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Re: Is it even possible at my age?
« Reply #93 on: March 15, 2021, 10:02:20 AM »
I'll add my story here too.

I was married with $0 net worth at 40 (1996).  I got serious about my finances then, but in the next 10 years I (bought a house with almost no money for down payment, was unemployed for 15 months, when I finally started working again my salary was down 25%, went through a divorce, have been paying out child support to today).  Only the last 4 years has my salary gone over $100k.

I would have quit 2 years ago at 56, but I am greedy and am working to get full pension at end of 2022.  I have investments now of $1.4Mil, no mortgage, and will have a pension of $45k/year.

I too was very frugal, my house was a fixer upper and I did most of the work myself.

It can be a slog, but if you want it, it can be done.

WOW!

What are your investment types?
I would love to say I am some genius, but I am hardly that.  I pick individual stocks mostly in the taxable and Roth IRAs (mostly mid & larger cap companies), and in my 457 account I mix and match as I feel over time (more small & mid cap funds - maybe 80% - and international at 20%).  Some years have been worse than the indexes, some years better, but always within a few percent.

As you can find mentioned many places here, when you are starting out the amount you save matters more than the types of investments.  In my early years I did everything I could to save money (made my own furniture, did all the house repairs, kept my car extra long, shopped at yard sales, had an in-house renter for 2 years, shop at Aldis for my food, and so on).  That seed money started to really snowball the last 5 years.  In those early years my balances didn't move all that much but now every day the amount changes more than it would in a month years ago.  You need to put together a strategy and stick with it and have confidence it will work.
« Last Edit: March 15, 2021, 12:17:16 PM by PhrugalPhan »

kimura

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Re: Is it even possible at my age?
« Reply #94 on: March 15, 2021, 10:45:19 AM »
Thanks for the response!

wenchsenior

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Re: Is it even possible at my age?
« Reply #95 on: March 15, 2021, 11:49:59 AM »
I'll add my story here too.

I was married with $0 net worth at 40 (1996).  I got serious about my finances then, but in the next 10 years I (bought a house with almost no money for down payment, was unemployed for 15 months, when I finally started working again my salary was down 25%, went through a divorce, have been paying out child support to today).  Only the last 4 years has my salary gone over $100k.

I would have quit 2 years ago at 56, but I am greedy and am working to get full pension at end of 2022.  I have investments now of $1.4Mil, no mortgage, and will have a pension of $45/year.

I too was very frugal, my house was a fixer upper and I did most of the work myself.

It can be a slog, but if you want it, it can be done.

WOW!

What are your investment types?
I would love to say I am some genius, but I am hardly that.  I pick individual stocks mostly in the taxable and Roth IRAs (mostly mid & larger cap companies), and in my 457 account I mix and match as I feel over time (more small & mid cap funds - maybe 80% - and international at 20%).  Some years have been worse than the indexes, some years better, but always within a few percent.

As you can find mentioned many places here, when you are starting out the amount you save matters more than the types of investments.  In my early years I did everything I could to save money (made my own furniture, did all the house repairs, kept my car extra long, shopped at yard sales, had an in-house renter for 2 years, shop at Aldis for my food, and so on).  That seed money started to really snowball the last 5 years.  In those early years my balances didn't move all that much but now every day the amount changes more than it would in a month years ago.  You need to put together a strategy and stick with it and have confidence it will work.

We have a similar story to yours except a couple hundred thousand behind you.  Our earnings were similar as well...didn't crack 100K/year in AGI until my husband was close to 50. 

When my husband was 40 we were about 100 grand in the hole in terms of net worth (mortgage, student loans, auto loan). We started to slowly build net worth over the next 10 years, but while we were never big spenders, we also didn't get really focused and serious about saving until he was about 48.  At that point, we had a net worth of about 300K.

But then in 2008 we had to go into a bunch more debt (second house, second car, supporting a parent in a separate household) so our net worth took a temporary big dive again.  After that, we got REALLY REALLY serious about savings.

Currently, about 12 years later, we have about $1,100,000 in cash assets (NW about 1,300,000), with a small remaining mortgage (no reason to pay it off at this interest rate), and husband is still working b/c he loves his job.  He'll probably retire at the usual time (around 65), but if we needed to, we'd be able to pull the plug in about 2 years (he'd be 61 and I'd be 52) if he wants.  But that's b/c we still support another adult in an entirely separate house. If it was just us we were saving for, we could pull the plug today.

We've never invested in anything but stock-heavy index funds, FWIW.  No stock picking for us...way too much of a crap shoot. We like the 'easy button'. Just set it and forget it.

OP is further ahead than we were at that age, that's for sure.
« Last Edit: March 15, 2021, 11:52:31 AM by wenchsenior »

BicycleB

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Re: Is it even possible at my age?
« Reply #96 on: March 15, 2021, 12:34:55 PM »
^Excellent advice! @kimura, you could just copy what they did ("stock heavy index funds, press the 'easy' button and forget about it") and be fine.

To explain more fully:
1. The choosing of adequate investments is the easy part.
2. What to get? Index funds with a large % of stocks are as effective as anything else, can be bought cheaply, and require no maintenance. Within that category, the next most important thing is low fees. You can find the fees by reading the disclosure statements or other descriptions from the company. Anything under 0.15%/year is reasonably low. The rest is details, though advice on the details is readily available here when you're ready. Vanguard is probably the safest company to buy these from and Fidelity can be good too.
3. Why does this work?
a. Index funds give a very good combination of safety and return compared to picking individual stocks, yet they require far less knowledge and work.
b. The fact that they're measurably a little bit better than individual stocks for most people is a bonus, but the key aspect is time savings.
c. Stock has a very strong, relatively consistent high performance over long time periods. If you plan to live another 30 years or more, you basically can't beat it.
d. For now, knowing you will be an investor, the downs in the market favor you as much as the ups do. If you're buying stock, a crash means that stocks are on sale.
e. That's all you need to know for the next 10 years. After that, you can adjust details to shift from saving mode to retirement mode.

Get your savings in order by paring down your expenses to the important ones, where you and your wife truly agree on what's important. Savings will occur and then you can invest as above. Wealth will follow.
« Last Edit: March 15, 2021, 12:38:51 PM by BicycleB »

dandarc

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Re: Is it even possible at my age?
« Reply #97 on: March 15, 2021, 01:01:27 PM »
OP - I think you said The Simple Path to Wealth was on the reading list - that will back up BicycleB's point. I think there are 3 really big-ticket items for getting to FI fast:

1. Manage household spending so there is always a substantial surplus

2. Learn about taxes - particularly for higher income folks such as OP, this can have a massive impact on time to FI

3. Don't Pay Off Your Mortgage - the 30 year fixed rate mortgage at today's super low rates is an almost absurd gift from our government in helping you build wealth. I mean if you're going to buy the house you live in that is - there's a lot to be said for renting as well.

And you'll read a ton and consider so many details and then ultimately come to the conclusion all of it is so simple - "Spend less than you earn - Buy Total Market Index Funds with the surplus" "max out traditional retirement accounts, HSAs, FSAs" "Don't Pay Off Your Mortgage (or just rent)".

kimura

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Re: Is it even possible at my age?
« Reply #98 on: March 15, 2021, 01:32:10 PM »
Again more encouraging words.

I have consumed so much information since I first posted this thread its amazing. Im excited to read this in a year from now.

By the River

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Re: Is it even possible at my age?
« Reply #99 on: March 16, 2021, 09:59:37 AM »
Again more encouraging words.

I have consumed so much information since I first posted this thread its amazing. Im excited to read this in a year from now.

Definitely come back in a year and give an update on your progress.  If you implement even half of the advice you've been given in this thread it should be an eye-opening improvement.