Your Saving Stragies for FI on a $70,000 Salary

[SofiaBourbon]

Hi All,

What are your saving/hack strategies to FI while making $70,000 per year?

[MrMoogle]

Max out 401k = $18,000
Max out tIRA = $5,500
Just doing that is $23,500 or 34%.
According to: http://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/
That gets you to FIRE in 27 years.

[2Birds1Stone]

Did you read ANY of the content here or on the blog prior to posting?

[jim555]

Without knowing the expenses the answer is not knowable.

[runningthroughFIRE]

1. Nope.  If the benefit of it outweighs the costs (delay to FI/RE), get it.  If not, then don't.
2. You'd be foolish not to.
3. See #2.
4. Depends entirely on your spending.
5. That's personal preference.  Some invest entirely in indexed stock funds, some mix in bonds.  Some mix in rental properties, some don't want the hassle.  Whatever floats your boat.

We need details if you want real advice.  Most of the general ideas you're asking about are covered in the blog itself.

[Yaeger]

Hi All,

What are your saving/hack strategies to FI while making $70,000 per year?

I guess that depends on what you're willing to sacrifice to achieve that. I'd shoot for a savings rate above 50%, if possible, but that'll likely require significant lifestyle changes if you're nowhere near that now. That's not an easy goal for everyone.

As an added bonus, it'll acclimate you to being happier with less which is what really drives your long-term savings.

[Mother Fussbudget]

You might try re-phrasing this question as a "Case Study" in the "Ask a Mustachian" section of the forums.  See the sticky topic there on how to present a case study.

[Gone Fishing]

Not much different than if I was making $35k or $140k.  Tax strategy might vary a bit, but otherwise just control one's expenses. 

[sol]

Lots of different strategies available.  Live on $14k/year, save the rest, and retire in five years.  Or live on $35k/year and retire in ~17 years.

Where you invest the money is way less important than how much money you invest.  Especially for those high savings rate short term plans, investment return is almost inconsequential.

[andy85]

1) spend less
2) save more
3) ???
4) profit

napkin math
70,000 - gross
less 18,000 - 401k
less 5,500 - ira
46,500 - taxable
take off 30% for taxes and other deductible items
32,550 net income
spend less than that

Did you read ANY of the content here or on the blog prior to posting?

^^and this

[CATman]

If your employer offers a health insurance plan with an HSA you and your employer together can contribute up to $3,350. Some of the HSAs administrators also allow you to invest some or all of these funds into low cost funds.

Without knowing your expenses much of the advice is just conjecture. So the general advice is save as much of what you make as you can. Throw it into some low expense index funds and wait until you have a big enough nest egg to withdraw 4% a year and have that cover your estimated living expenses.

[runningthroughFIRE]

Not much different than if I was making $35k or $140k.  Tax strategy might vary a bit, but otherwise just control one's expenses.

Exactly this.  Think about what really creates solid, lasting happiness for you and spend your resources there.  Anything above that is extra that you can save, no matter what your income level is.  Max out your tax-advantage space and invest in simple, diversified investments that don't charge high fees.  Don't mess with fancy securities if you don't understand them.  Make this a routine and all you have to do is keep calm and don't fuck it up.

Since you've revised the question
In my personal case: I'm a bit shy of 70K, but I make a conservative budget to save 50% of my salary through tax-advantaged accounts alone.  I make point-of-sale decisions on whether I need/want something enough, and usually come in way under budget and end up saving more than that.  Everything gets invested except about 10K I keep in cash as an emergency fund (As a single guy, my job is all the cash inflow I have, and I'd be up shit creek if something were to happen and I suddenly lost that income stream without the cash on hand. YMMV).