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1. 

   secretwealth
   

   Expert
   Joined: Jun '11
   Posts: 1,510

   Firstly, hi everyone. I was referred here from a post on Reddit. I'm devoted to the idea of working as little as possible, and I'm really excited to find this forum. I'd like to introduce myself by asking for a little feedback on my goal: to semi-retire in New York City by 40. Here are my stats:
   Personal stats: 31 yrs old, 30yr old wife, no kids (we're planning to have one in the next 6 years)
   Current Salary: ~$95,000 gross per annum; wife's salary is ~$25,000
   Savings: ~$25,000 in money market accounts and foreign CDs
   Debts: $79,000 mortgage
   Mandatory outgoings: $600 monthly maintenance fee for my co-op apartment

   I figure that I need maybe $400 for my half of the monthly expenses, plus $300 for the apartment maintenance. This would bring my monthly expense requirements to $700. This would mean I need 280k before retiring, which is going to translate to ~$2580/mo. in savings for the next 9 years, excluding money needed to pay off the mortgage (since my wife will pay for half of the mortgage and the $25k in savings is technically mine, I'm assuming this and a few bonuses here and there will cover my half of the current mortgage debt).

   Do you think this plan is reasonable?

   Posted 1 year ago #
2. 

   mikeBOS
   

   Master
   Joined: Nov '10
   Posts: 554

   I think you failed to calculate gains on investments from your savings that you will be accumulating over the 9 years. You're not just going to be stashing money into your mattress for 9 years and then buying $280k worth of stock all at once I assume. The stock will be growing as you save it over the 9 years so you should add that into your numbers.

   I'm interested to hear how your $400/month expenses breaks down.

   Posted 1 year ago #
3. 

   BeyondtheWrap
   

   Journeyman
   Joined: Jul '10
   Posts: 266

   It's totally doable. Nice that you pretty much have housing taken care of.

   Health insurance is pretty expensive in NYC. How are you planning to handle that?

   Posted 1 year ago #
4. 

   m741
   

   Master
   Joined: Jan '11
   Posts: 733

   Housing is the single biggest expense in NYC compared to other areas, and you have that at a low level (for NYC) - does $600/month include your mortgage payments?

   I think you're on the right track and your goal is achievable, but that you need to get some experience in investing - I'm assuming you don't have experience since you don't have an investment account listed. I don't know what rate of returns you used for your calculations, but you'll probably need to do some management of your investments once you've retired and it's best to start getting a feel for that immediately.

   You could start by reading a few books on investment, opening an account, and then putting 5-10k into some low-risk investments (eg blue chip stocks, preferred stocks, bonds and index funds).

   Posted 1 year ago #
5. 

   Wes
   

   Novice
   Joined: Jul '11
   Posts: 17

   I live in Manhattan, in a limited equity co-op. It's very affordable. It can take a few years to get in, but well worth it.

   Posted 1 year ago #
6. 

   JohnnyH
   

   Expert
   Joined: Jul '10
   Posts: 1,363

   I think calculating for 11% annual returns might be too optimistic. Certainly possible, but not something I'd count on. [Nevermind! Thanks for pointing out my error below, beyond]

   Before I started worrying about investing I'd focus on cash flow analysis (where your money is going) and how to improve your savings. Record and analyze every expense and go through it once a month looking for ways to improve... Once the capital starts really piling in you should have your saving figured out. Then I'd turn the focus to investing.

   Checkout akratic's thread for some awesome accounting and data visualization ideas ;)
   http://forum.earlyretirementextreme.com/topic.php?id=85

   Posted 1 year ago #
7. 

   BeyondtheWrap
   

   Journeyman
   Joined: Jul '10
   Posts: 266

   @JohnnyH - "I think calculating for 11% annual returns might be too optimistic."

   Secretwealth was calculating for 3% annual returns. His expenses are 700/month, so 8400/year, which is 3% of 280k.

   The 2580/mo. is the amount secretwealth will have to save each month to reach his goal in 9 years.

   Posted 1 year ago #
8. 

   secretwealth
   

   Expert
   Joined: Jun '11
   Posts: 1,510

   Firstly, I'm sorry for taking soooo long to respond. I've been moving into my new place and things have been hectic in general.

   To answer the question--the $600 is the co-op maintenance fee. This includes heating, water, sewage, trash removal, and property taxes; the $600 is an upper estimate (it's actually around 575) and is pretty normal for a co-op in NYC, although it seems like a lot.

   I am planning to pay off the mortgage asap. My #1 goal right now is paying that off ASAP; if anyone thinks I should defer and sock the money into other things, I'd love to hear your input.

   Regarding health insurance: there are plenty of charity clinics and free hospital services. I am fairly healthy now so this isn't a major concern for me. (I haven't really needed to see a doctor in 5 years). My wife also plans on working so I'm hoping that I can get insurance through her until socialized medicine trickles down from Vermont to NY State, which I think will happen in the next decade.

   m741: Investment is indeed an issue. I have some experience, but it isn't very good. I was badly burned in 2008 on stocks and have not wanted to get back in the market since. I have had much better experience with real estate, which is one reason why I bought this co-op. I'm quite sure it's a good investment and will appreciate considerably, but I want to calculate assuming that I stay here, since my wife loves the apartment.

   Posted 1 year ago #

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