Hello everyone and a thank you to Jacob for this site. I have truly had an ephiphany hence my username. I am 46 yrs old. I do not possess higher education credentials. I earn $48000/yr USD. reside in the SF Bay area. I do not have any payment obligations as far as car or mortgage. I had been a stay at home wife without the benefit of marriage, hence no retirement/social security no alimony no payoff no assets. Had to start over at 40 like I was 20.I have only been in the workforce for 6-7 years. I have approx. $10000 in savings. I worked thru this down economy while many more skilled/qualified were out of work. I have a niche job. Because of a breakup I have had to move out on my own. In renting a new place I had to make accomadations for the work I do. I needed a place that I could come and go at all hours and not feel like I was disturbing the peace, hence no roomies. I found a place for $975+all utilities. This is much more than what I have been reading on site, but it seemed a bargain with everything I have seen on craigslist and the proximity for my job. I absolutely have to have a cell phone to be reached at all hours. It is not a fancy smart phone. It cost $65/mo. I do not own a car because that is included in the work I do. I do own a scooter. 60 MPG. I have been racking my brain over and over on how to up my income without going the 4yr school route. The thought of paying money and time to acquire skills to sit at a desk job in front of a computer...just cant. I essentially work in the field. I initially got to this site from vagabondish. The travelling blog. With this terrible breakup I am going thru I just thought I am not tied to anything and can just step off and leave. Travel as far as money takes me work along the way and come back, but I would be in less of position than now which I think is pretty low. After reading thru some of this site I think I should have more of a goal and get FI. Then I can run off and see the world. So..is this doable at my age? Thx for taking the time to read and writing any comments/advice. also questions are great beacause I am sure I am not seeing all sides.
Is this "doable" for my circumstances?
You say you have no debt in terms of mortgage or car... but you didn't say you are debt free. Are you?
You have rent of 11700/yr. Plus scooter and food. Have you calculated your savings rate yet? As you continue reading the site, you'll find that income isn't the important number, it's how much you can save that is the ticket to meeting your goal.
You have rent of 11700/yr. Plus scooter and food. Have you calculated your savings rate yet? As you continue reading the site, you'll find that income isn't the important number, it's how much you can save that is the ticket to meeting your goal.
@ Chris Hi and thx for input. I am debt free. The scooter is an old Honda elite I bought used. I have a work car that is for my use which I am not responsible for any cost:) I know my housing is biggest outlay. I thought I did pretty well considering. I have read other statements that using 25% of gross for housing was on right track. I signed a years lease so I have to deal. My savings rate is 50%. I know not the 70%. I am looking into acquiring part-time work for weekends to boost my savings.
@Nagerusu Thx for the encouragement. I thought I did ok considering it is the bay area, is not a dump and it includes all my utilities and good for walking and closer to my job. So my housing/utilities costs are $12000/year. If I could have a roomie I would. So I need to get extra work even though I already work a full time demanding job. Just need to work my *ss off for a few years to get to the other side of the rainbow. LOL Have to start someplace.
A detailed report of expenses would help with suggestions... There is no way you can move? This job only exists in SF?
Many roommate situations wouldn't be bothered by you coming in late, assuming you didn't have to make noise (stay at home sound engineer). I think looking for an acceptable housemate(s) situation would be your best bet.
CELL PHONE:
What is your approx required usage? PagePlus (uses Verizon network) offers large savings over contract providers:
*4cents/minute (when you purchase $80 refill, good for 1 yr).
*$30/mo: 1200 mins, 1200 txt. 300mb data.
*$45/mo: unlimited talk/txt. 100mb data.
I have a smart phone I've combined with free WIFI SIP calls at home. Since I make well under 750 mins/mo ($30/.04 [$80 2k min refill rate]) I am prepaid. My average monthly cost is about $5, after the min monthly fee.
Also, you might want to look at VirginMobile. They have a $25/mo 300min, 300txt, "unlimited data" plan. While the "unlimited" data will most likely be throttled over a few GB, it might help you eliminate your internet bill (tether/wifi hotspot).
Best of luck!
Many roommate situations wouldn't be bothered by you coming in late, assuming you didn't have to make noise (stay at home sound engineer). I think looking for an acceptable housemate(s) situation would be your best bet.
CELL PHONE:
What is your approx required usage? PagePlus (uses Verizon network) offers large savings over contract providers:
*4cents/minute (when you purchase $80 refill, good for 1 yr).
*$30/mo: 1200 mins, 1200 txt. 300mb data.
*$45/mo: unlimited talk/txt. 100mb data.
I have a smart phone I've combined with free WIFI SIP calls at home. Since I make well under 750 mins/mo ($30/.04 [$80 2k min refill rate]) I am prepaid. My average monthly cost is about $5, after the min monthly fee.
Also, you might want to look at VirginMobile. They have a $25/mo 300min, 300txt, "unlimited data" plan. While the "unlimited" data will most likely be throttled over a few GB, it might help you eliminate your internet bill (tether/wifi hotspot).
Best of luck!
Congratulations on being debt free, especially since you managed your position after a "restart".
I understand your position about not wanting a roommate; I'm the same way. And the rent you're paying is a good deal, considering your area. But realize that foregoing a roommate is a luxury, and will delay your FI date. You can use akratic's calculator to figure the number of days this extra expense will cost you. For me, I've come to terms with it, justifying the extra time I'll need.
The quickest way to increase your income is from your current job. Make sure you ask for cost-of-living increases. Regardless of whether your personal rate of inflation is increasing, push for an annual raise at least equal to the CPI.
Finding part time work is one way to boost income. You could probably add another 10% annually by working a shift on the weekend. Do you have any special skills that might net you a higher rate than minimum wage? Could you use your scooter for business? Also, if you can find a business that you operate from your apartment, you can take advantage of tax breaks to "lower" your rent without adding a roommate.
Your current investable cash could throw off about half a month's rent, but I'd keep that as cash for now (in a high-yield savings account).
I understand your position about not wanting a roommate; I'm the same way. And the rent you're paying is a good deal, considering your area. But realize that foregoing a roommate is a luxury, and will delay your FI date. You can use akratic's calculator to figure the number of days this extra expense will cost you. For me, I've come to terms with it, justifying the extra time I'll need.
The quickest way to increase your income is from your current job. Make sure you ask for cost-of-living increases. Regardless of whether your personal rate of inflation is increasing, push for an annual raise at least equal to the CPI.
Finding part time work is one way to boost income. You could probably add another 10% annually by working a shift on the weekend. Do you have any special skills that might net you a higher rate than minimum wage? Could you use your scooter for business? Also, if you can find a business that you operate from your apartment, you can take advantage of tax breaks to "lower" your rent without adding a roommate.
Your current investable cash could throw off about half a month's rent, but I'd keep that as cash for now (in a high-yield savings account).
I haven't been a member of this site long, but one of the things that I have seen repeatedly is that it is not the income, rather the expenses you should focus on.
For example, to retain the same lifestyle you currently have now, you would need $502,000. This would allow safe withdrawal rate (4%) of $20,080 per annum, which would cover:
Rent 11700
Cell 780
Scooter 1200
Food 2400
Misc 4000
20.080,00
By assuming a 5% growth on savings & investments per year, if you were to continue to save 50% ($24k) per annum, you would reach the $502k in just 15 years (and that is keeping the same apartment, same lifestyle you have now).
Now if the reason you are living where you live is for work, then we can have a relook at your expenses estimating travelling costs:
Rent 0
Cell 120
Scooter 0
Food 4000
Airfare 2000
Accomodation 5000
11.120,00
Would need a further 268k, which would take 9.5 years.
I'd recommend the book "Your Money or Your Life" and pay particular attention to how the author focuses on work expenses, and how to minimise your outgoings.
If you didnt work, you would still pay rent, though I'm assuming it wouldnt be that high, cell phone costs would be a lot lower.... I'd say 10 years, and you'll have enough to travel the World
For example, to retain the same lifestyle you currently have now, you would need $502,000. This would allow safe withdrawal rate (4%) of $20,080 per annum, which would cover:
Rent 11700
Cell 780
Scooter 1200
Food 2400
Misc 4000
20.080,00
By assuming a 5% growth on savings & investments per year, if you were to continue to save 50% ($24k) per annum, you would reach the $502k in just 15 years (and that is keeping the same apartment, same lifestyle you have now).
Now if the reason you are living where you live is for work, then we can have a relook at your expenses estimating travelling costs:
Rent 0
Cell 120
Scooter 0
Food 4000
Airfare 2000
Accomodation 5000
11.120,00
Would need a further 268k, which would take 9.5 years.
I'd recommend the book "Your Money or Your Life" and pay particular attention to how the author focuses on work expenses, and how to minimise your outgoings.
If you didnt work, you would still pay rent, though I'm assuming it wouldnt be that high, cell phone costs would be a lot lower.... I'd say 10 years, and you'll have enough to travel the World
Welcome, Epiphany! It sounds as though you're doing a lot of good things to help you reach an early retirement. It also sounds like you've done a lot of things to help you make a better future for yourself after the re-start. Good for you. I'm watching my brother go through a re-start, and it's a tough process.
Some thoughts: you mentioned not having the benefits of having been a spouse due to not being married. Some states recognize common law marriage, so if you lived for some portion of your time in another state in a situation resembling marriage, you might be able to claim some benefit from that. I suspect you've already thought of this, but thought I'd mention it.
Are you now paying social security on your earnings? In my opinion you should, if you can, unless you believe that SS will not pay an appropriate benefit in 16 years when you can first claim it AND you have a better alternative for the money. Even if you pay both the employee and employer portions of social security, the first $40k of taxes paid will get you a relatively high yield benefit that is inflation adjusted.
Many folks above have suggested that you are 10-15 years away based on your current numbers. 16 years from now you'll be able to claim a SS benefit, if you want to, and have contributed. If planned properly, that benefit might make you able to exit the daily grind a bit earlier.
Lastly, given your income numbers, it would seem that most, if not all, of you investment capital can be held in a tax advantaged account (e.g. IRA, Roth, etc).
Some thoughts: you mentioned not having the benefits of having been a spouse due to not being married. Some states recognize common law marriage, so if you lived for some portion of your time in another state in a situation resembling marriage, you might be able to claim some benefit from that. I suspect you've already thought of this, but thought I'd mention it.
Are you now paying social security on your earnings? In my opinion you should, if you can, unless you believe that SS will not pay an appropriate benefit in 16 years when you can first claim it AND you have a better alternative for the money. Even if you pay both the employee and employer portions of social security, the first $40k of taxes paid will get you a relatively high yield benefit that is inflation adjusted.
Many folks above have suggested that you are 10-15 years away based on your current numbers. 16 years from now you'll be able to claim a SS benefit, if you want to, and have contributed. If planned properly, that benefit might make you able to exit the daily grind a bit earlier.
Lastly, given your income numbers, it would seem that most, if not all, of you investment capital can be held in a tax advantaged account (e.g. IRA, Roth, etc).