How my wife and I saved up $1M by age 30 and became FI!

Where are you and where are you going?
freedomwithbruno
Posts: 15
Joined: Thu May 21, 2015 2:12 pm
Contact:

How my wife and I saved up $1M by age 30 and became FI!

Post by freedomwithbruno »

Hey ERE'ers!

As of March, my wife and I saved up $1M and are now planning to live on a maximum of 4% of the portfolio annually ($40,000). Ideally our annual costs will be less than that. We've quit our jobs, and are currently driving down to Costa Rica (from Oakland, CA), and we're in Nicaragua right now!

Although I just signed up on the forum, I first started reading Jacob back in 2011 when my wife and I started exploring the possibility of becoming FI. In fact, I used to live just a few miles from Jacob in Oakland, CA (although I've never met him).

ERE has helped me in the past, so I wanted to post here and share some details and answer any questions anyone might have:

"Early Retirement" became a goal for us three years ago. My wife and I started reading MMM/ERE and getting serious about reducing expenses, we moved all funds into Vanguard and optimized the portfolio, then kept working hard at our careers. Knowing that Jacob was living the good life in a trailer park only a couple miles from my home was extra inspiration.

My wife has a Chemical Engineer degree, and I have Information Systems degree. Before we quit our jobs and started traveling (two months ago), we lived in the San Francisco Bay Area (Oakland) and rented a house.

Our income tax "total income" for 2014 was $233,000. For 2013 it was $204,000.

Here is a screenshot of my Mint.com Monthly Expenses for 2014 (monthly average was $1,764, which does not include the house we have been renting in Oakland, CA which is an additional $2,200 - so a total annual spend of $47,576.

Here is a link to a Google Spreadsheet Chart showing the growth of our savings over the last 3 years.

Ideally, we plan on doing a 3% "safe withdrawal rate" and having an annual budget of $30,000. However, we are allowing ourselves an upper limit of 4% withdrawal if necessary while we travel. We'll see how it goes.

If you're curious I have some additional details posted here: http://freedomwithbruno.com/financial-independence/

Let me know if you have any financial questions, and I'd be happy to answer. Also, I'll keep updating this journal with our progress as well.

Thanks!
Last edited by freedomwithbruno on Mon Nov 02, 2015 5:59 pm, edited 1 time in total.

TopHatFox
Posts: 2322
Joined: Thu Oct 17, 2013 10:07 pm
Location: FL; 25

Re: How my wife and I saved up $1M by age 30 and became FI!

Post by TopHatFox »

Congratulations! It reads like you both worked hard at your careers and at saving. You also thankfully had many advantages along the way.

-------------------------------------------

Some interesting notes:

Engineers & IT folk sure do get paid lots, even right out of college. You & your wife didn't even need to optimize expenses to 7k/ year. Good to know. (I suppose most non-STEM people would likely just have to reduce expenses further to need less capital, or work for more years).

Economies of scale via partnership & less taxes via marriage also seem to be useful, though these two might also be a double edged sword if break up or divorce & related taxes/fees.

I think living under FORTY FRIGGIN' THOUSAND a year will be fairly easy if your travelling is ERE or MMM like, especially in "developing" countries, where the average person tends to get paid much less than people in "developed" countries.

Dragline
Posts: 4436
Joined: Wed Aug 24, 2011 1:50 am

Re: How my wife and I saved up $1M by age 30 and became FI!

Post by Dragline »

Congrats!

This would tend to support several theses that we discuss here: (1) Some types of degrees are more equal than others for accelerated income early (e.g., STEM degrees); (2) it is possible to live frugally and save money in a relatively high expense area like SF-bay; (3) almost nothing beats having two people on the same page working toward a common goal.

Well done. Take a detour and stop in Belize if you get a chance at some point. I would suggest a stint on Caye Caulker if you can swing it.

User avatar
Egg
Posts: 250
Joined: Sat Oct 04, 2014 10:59 am

Re: How my wife and I saved up $1M by age 30 and became FI!

Post by Egg »

Awesome. Were you saving a large perpercentage even before three years ago or did you smash it with investments? Even at ~200k combined per year, 100% savings rate, that's a five year job without returns.

almostthere
Posts: 284
Joined: Tue Jul 09, 2013 1:47 am

Re: How my wife and I saved up $1M by age 30 and became FI!

Post by almostthere »

Congratulations and welcome to the club!

30K sounds about right for Lat Am and traveling.

Please keep us posted on the phases of the transition.

User avatar
GandK
Posts: 2059
Joined: Mon Sep 19, 2011 1:00 pm

Re: How my wife and I saved up $1M by age 30 and became FI!

Post by GandK »

Well done! Congrats!

Please journal all your adventures. I love to read about others' travels and post-retirement projects.

FI Fighter
Posts: 68
Joined: Wed Feb 08, 2012 9:00 am
Contact:

Re: How my wife and I saved up $1M by age 30 and became FI!

Post by FI Fighter »

Congrats, that sounds so incredibly exciting! Coincidentally, I also stumbled upon ERE in 2011 and the blog/book changed my life forever.

I'm expecting to get to the $1MM marker in a few months as well, and most likely will pull the plug and start a new chapter soon.

Looking forward to checking out your blog and reading more about your journeys and travels!

steveo73
Posts: 1733
Joined: Sat Jul 06, 2013 6:52 pm

Re: How my wife and I saved up $1M by age 30 and became FI!

Post by steveo73 »

Maybe its just me and I'm getting cynical however its comes across to me as a sell.

cmonkey
Posts: 1814
Joined: Mon Apr 21, 2014 11:56 am

Re: How my wife and I saved up $1M by age 30 and became FI!

Post by cmonkey »

Awesome! That is such a great place to be at and have someone to share it with on top of that! Looking forward to hearing of your adventures.

mxlr650
Posts: 165
Joined: Tue Apr 05, 2011 9:33 pm

Re: How my wife and I saved up $1M by age 30 and became FI!

Post by mxlr650 »

If you're curious I have some additional details posted here: http://freedomwithbruno.com/financial-independence/

Let me know if you have any financial questions, and I'd be happy to answer. Also, I'll keep updating this journal with our progress as well.
Congratulations!!

A question on your investment graph: assuming you made 200k, and assuming conservative total tax bracket of 30%, 100k is goes to tax and living expenses. How come your graph is showing essentially 500K+ increase in 2.5 years? Did you change your investment profile after retirement to more conservative? If yes, what did you invest in before?

I hope you asked Jacob for permission before posting this obvious plug to attract readers to your blog. Essentially you have posted this in multiple other places with very little change in “intro”.

User avatar
C40
Posts: 2748
Joined: Thu Feb 17, 2011 4:30 am

Re: How my wife and I saved up $1M by age 30 and became FI!

Post by C40 »

Congratulations!

I'm enjoying the blog.
mxlr650 wrote:
I hope you asked Jacob for permission before posting this obvious plug to attract readers to your blog. Essentially you have posted this in multiple other places with very little change in “intro”.
steveo73 wrote: Maybe its just me and I'm getting cynical however its comes across to me as a sell.
I'm glad he/she posted the link to their blog. I'm enjoying reading it. They aren't trying to sell anything or trick people, it's just a blog about their post-FI travels. This is more relevant than a large portion of other threads we have here. I mean - they posted it in the Journal section and their blog is essentially a journal.

freedomwithbruno
Posts: 15
Joined: Thu May 21, 2015 2:12 pm
Contact:

Re: How my wife and I saved up $1M by age 30 and became FI!

Post by freedomwithbruno »

Thank you all for your kind words! Your encouragement is truly appreciated!

Sorry for my delayed response, as it's difficult to get reliable internet connections down here. We just left Nicaragua and entered Costa Rica, which we're both excited about!
mxlr650 wrote:Congratulations!!

A question on your investment graph: assuming you made 200k, and assuming conservative total tax bracket of 30%, 100k is goes to tax and living expenses. How come your graph is showing essentially 500K+ increase in 2.5 years? Did you change your investment profile after retirement to more conservative? If yes, what did you invest in before?
Thank you! We maxed out our 401k (with nice matching contributions), IRA, HSA, and employee stock options - which allowed the portfolio to grow fast. In additional, market performance has been really good since 2009.

We've tried to maintain a "Lazy Core Four" portfolio before and after FI: http://www.bogleheads.org/wiki/Lazy_por ... portfolios

Egg wrote:Awesome. Were you saving a large perpercentage even before three years ago or did you smash it with investments? Even at ~200k combined per year, 100% savings rate, that's a five year job without returns.
We were always pretty good savers even before we committed ourselves to FI. I grew up in a frugal home and learned my habits early. We've always maxed out retirement savings options. Once we started reading ERE/MMM, we really reduced expenses further - for example, eating out was a serious expense that we cut back on. After optimizing our expenses, it was just a matter of going to the office and sitting in a chair all day everyday!

elfoolio999
Posts: 6
Joined: Fri Dec 19, 2014 6:05 pm
Location: NorCal

Re: How my wife and I saved up $1M by age 30 and became FI!

Post by elfoolio999 »

Maybe i missed it, but does your $1M portfolio include your tax sheltered savings (e.g. 401(k) and IRA balances)? Thanks and congratulations! Inspiring for sure...

freedomwithbruno
Posts: 15
Joined: Thu May 21, 2015 2:12 pm
Contact:

Re: How my wife and I saved up $1M by age 30 and became FI!

Post by freedomwithbruno »

elfoolio999 wrote:Maybe i missed it, but does your $1M portfolio include your tax sheltered savings (e.g. 401(k) and IRA balances)? Thanks and congratulations! Inspiring for sure...
Thanks! Yes the $1M includes all of our assets (401, IRA, etc) as well as pensions. It does not include expected Social Security payouts. Also we do not own any real-estate (only REITs in our portfolio).

mxlr650
Posts: 165
Joined: Tue Apr 05, 2011 9:33 pm

Re: How my wife and I saved up $1M by age 30 and became FI!

Post by mxlr650 »

C40 wrote:I'm glad he/she posted the link to their blog. I'm enjoying reading it. They aren't trying to sell anything or trick people, it's just a blog about their post-FI travels. This is more relevant than a large portion of other threads we have here. I mean - they posted it in the Journal section and their blog is essentially a journal.
When OP posted the journal, I read it, and from here I found references to Reddit thread, and one or two more sites where OP seems to have posted; and since the "product pitch” was essentially the same across different sites, and the title of the journal (how OP achieved FI) is mostly misleading compared to blog content (post-FI adventures), I could only reasonably speculate that OP wants more readers to the blog (which is not a bad thing). I did not even remotely hint that OP is trying to “sell anything or trick” people – it is just your speculation, and since you quote my response I suggest you reread my original response and tell me where i made that claim.

User avatar
C40
Posts: 2748
Joined: Thu Feb 17, 2011 4:30 am

Re: How my wife and I saved up $1M by age 30 and became FI!

Post by C40 »

Stay cool buddy.

Along the lines of your own strategy - read my post again. I didn't claim that you said those things. That sentence was just a statement of my opinion. Including a quote in a new post does not imply that the writer has decided the quoted post is claiming the opposite of any sentence in the new post.

jacob
Site Admin
Posts: 15906
Joined: Fri Jun 28, 2013 8:38 pm
Location: USA, Zone 5b, Koppen Dfa, Elev. 620ft, Walkscore 77
Contact:

Re: How my wife and I saved up $1M by age 30 and became FI!

Post by jacob »

Oi! I guess the issue the issue is that occasionally, the forum gets some, uh, self-promotional cross-posting which is only tangentially relevant which I consequentially proceed to delete... but I judged that not to be case here.

User avatar
C40
Posts: 2748
Joined: Thu Feb 17, 2011 4:30 am

Re: How my wife and I saved up $1M by age 30 and became FI!

Post by C40 »

to add - mxlr650 - sorry - I don't like the I offended you (how much is so hard to tell on the internet)..

One of the challenges I perceive in this forum is that after people reach FI and retire, or sometimes even after they get on 'cruise control' to FI, they can lose interest in posting on the forum. As a result, most of the forum population is "on the uphill side" of FI. I think it's very nice to have people on "the downhill" side active in the forum. So when I see a new forum poster who is FI and retired, and other members challenge their first posts, I wish we would be more welcoming.

freedomwithbruno
Posts: 15
Joined: Thu May 21, 2015 2:12 pm
Contact:

Re: How my wife and I saved up $1M by age 30 and became FI!

Post by freedomwithbruno »

Folks, my wife and I are now in Costa Rica living in a nice house a couple minutes walk to a quiet beach. We have a nice little pool in the backyard of our rented house, and we see monkeys in the trees above us everyday. We bought some longboards and are slowly learning to surf. Life is peaceful, and the internet connection is good!

When we were traveling through Mexico, it took us 34 days and our average expense for both of us was $93.58 per day. Using that number to project an estimated annual cost of living on that daily number equals $34,155.

As an update, we just calculated our expenses while we were traveling through Nicaragua. We spent 17 days in Nicaragua, and the daily average was only $60.74. This would be equivalent to an annual cost of living $22,170 per year. So far, we're happy to have tightened our expenses to accommodate our target $30,000 budget!

mxlr650
Posts: 165
Joined: Tue Apr 05, 2011 9:33 pm

Re: How my wife and I saved up $1M by age 30 and became FI!

Post by mxlr650 »

@C40: it would be really amusing if we start arguing on some trivia and there is OP watching monkeys up in CR – we cannot let that happen :-)

I did not take any offense at all, however i was surprised that my wordings in the first post could be interpreted that way, and since you say you didn’t, its no big deal.

You make a good point that most people after FI stop posting, and I would have done the same, mostly because I was not sure how many would enjoy such a thing on a pre-FI focused forum; however, I will make an effort to provide an update every now and then.

BTW, isn’t there a principle that says its hard to predict if someone on the internet will interpret a posting as a intentional humor or some such? What is it called?

Post Reply