Elias's journal

[elias]

Hi all,

I'm very encouraged by this forum and decided to track here my lifepath to FI as well. One of my biggest desires as of now is to get financial freedom, trying to fit it into FI.

I'm 28 years old single, and a good amount of my life I was moving from place to place (changing cities, countries) and was imagining my future pretty like the same. My recent move was from EU to the US around 1.5 years ago, never been here before and so far I like the place. I started to accumulate some cash (just by a common sense) a few years ago, but then a couple of decisions vanished it to nearly $0. As an outcome of one of such, I own some cheap real state in one of the countries I've been, which is not generating cashflow as of now (thus liability).

My financial education here started with a ton of services that I was able to use, and very recently I came to some millennial-style distribution of my portfolio. I recently again changed my residence to LA, and a few months ago started to save and invest whatever I can. So far it's ludicrously small (a start) and I'm hoping to raise amount/frequency of those deposits.

My portfolio mostly consists of Wealthfront (Roth IRA with roboadvisor and projected 7-8% returns) and Fundrise (eREIT with 7-14% returns if you believe their last report ) +couple experimental accounts worth less than $500 each.

Income:
Pre-tax FTE $100k (CA taxes giving me a hard time here, resulting in $72k)
Expenses:
rent+utilities $2.5k, householding hits around $2k (and I somehow missing $1.5k somewhere)
altogether, my monthly spending is about 75%
Debts+liabilities:
no loans, I use CC for shopping, balance got void every month from checkings
cheap real estate, not generating cash flow (I left a few thousands of dollars for bills, should be enough for the couple next years if I don't sell it sooner )
Investments:
So far I was saving/investing around $1,5k a month, distributing across accounts, which resulting in 25% monthly savings
Assets:
CapitalOnce360 savings of $1.5k
Overall portfolio: $8300
Cash: 0.72%
Intl bonds: 8.75%
U.S. bonds: 8.47%
Intl stocks: 14.9%
U.S. stocks: 15.73%
Alternatives: 51.43%

So far its far away from being portfolio (don't blame me, I just started), and furthermore, diversified portfolio (especially according to PersonalCapital), with a major piece in Alternatives (eREITs), but I keep Fundrise 50% as it shows steady growth. The stock market is down, and one of my stock accounts lost 15% already since I was lucky enough to invest in Nov/18.

My goals for the nearest future:
- extremely increase regular investment amount!
- move to a cheaper place (rent and taxes are killing my abilities to invest more)
- invest in stocks and bonds to achieve better diversification (and put roboadvisors+eREITs to 40% of portfolio)
- buy an apartment/house, which would be ideal to turn into rent-out cashflow later (unless its some kind of duplex)
- I try to invest my free time in generating other cashflow sources, like creating and developing business(es) with low-to-0 maintenance and management costs (collaboration welcome)

My long-term goals:
- reach financial independence altogether with financial freedom before 45
- maintain a couple of positive cashflow businesses with my full-time involve in my personal projects
- travel more, getting second citizenship of a country with as many borders open as possible

I will be posting updates more quarterly than monthly since my portfolio is very young (unless some big events/changes happening).
Any questions/suggestions welcome!

[Nicolino]

Hi Elias, welcome to the forum! I think one first very useful step is to really scrutinize and stabilize your spending. If you are saving 1,5 K/month, that´s 18 K/year out of a 72 K/year take away salary is ~25% savings rate. I would go through your expenses and see how can you take it to 50%, the gains from +50% saving rate start to pile up, at a 50% you are buying a "year of freedom" for every year you work, that without even taking into account compound interest in your savings. Also a detailed view on your finances will let you understand about what do you need to live the post FI life you want (you need to be realistic). Regarding investments, I do believe in simple and low cost.

Cheers!

[prognastat]

Hi Elias, welcome to the forums.

Starting at 28 and wanting to retire by 45 you'll probably have to get your savings rate to at least about 50%. So definitely would be looking for some ways to cut down costs. It sounds like you're already working on getting your housing/rent cost down. Do you know what your other big expenses are in your budget and where you may be able to trim it up some?

[Cheepnis]

Welcome Elias!

I was where you are not long ago (and still not much further along when it comes right down to it). The power of reducing your expenses is extremely noticeable if you're starting from a big fat 0. Watching those numbers leap up due to the work you are doing optimizing your life and improving your skills is extremely satisfying. Put in the work to alter your frame of mind about money. Use constraint as an exercise to learn about yourself. Try not eating meat and think of it as an exercise in culinary creativity. Get rid of the smartphone to get better at chit-chat and remember what a magazine is.

This is the way I approach lots of things and I've yet to find anything I actually miss. In other words I don't think I've actually pushed myself to the limit before. I'm finding the longer I stay on the path the less I like outsourcing things and the more I love the process of figuring out how to keep it in house. Subsequently my skills are developing, my creativity and problem solving ability is booming, and my money is accumulating.

What was the circumstances of all of your travel? Where all have you been?

[wolf]

Welcome Elias! How did you find out about FI and/or ERE?