Recently I've been looking at different saving strategies trying to find the most efficient route to FI.
Here's what I'm currently doing: 65% of my net income goes into savings and 20% gross + a 5% match into my 401k. From the net savings $420 /mo goes into a Roth IRA that is a dividend stock allocation (yields 5.4%), $200-300 a month goes into a savings account for various living expenses (auto repair & ins., vacations etc), and the rest into my individual account (dividend stocks: yields 6.6%). I also have 5 months living expenses in a dividend ETF (yield 3.14%) with Schwab which is where I bank. My 401k is allocated towards bond and dividend funds (I don't have those #'s in front of me right now).
Recently I've been running some various scenarios thru some excel spreadsheets I've made and doing some research into high yielding stocks. I realized that if I maximized my savings into the individual account by not contributing to the 401k or Roth, and transferring all of my other accounts into the individual account, selling all my current holdings and buying the top 10 highest yielding stocks (which avg 17%) I would be FI in around one year. Hhhmmm...
Now I haven't done this or really even seriously considered it, but it has got me thinking about my current allocation of funds per pay check.
Is it better to max out the 401k and Roth contributions (of which the tax advantages are age restricted and the 5% company contribution is time restricted in terms of vesting), or can that money be better used now?
IE: a more volatile portfolio of a smaller size covering my living expenses could allow me to use 100% of my income to build a more stable long term portfolio (converting the smaller, more volatile funds over to the long term fund when the total dollar amount met the required FI amount at the lower yield rate).