NE Tom's Journal

Where are you and where are you going?
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NEtom
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Joined: Sun Dec 27, 2015 9:38 pm

NE Tom's Journal

Post by NEtom » Tue Dec 29, 2015 6:47 pm

Hi All. I wanted to start a journal here. I just finished Jacob's book. It's thorough and is another great resource in achieving FI. Frankly, I won't be maximizing my frugality like he suggests, but we will be saving FAR more then our peers are.

Quick Biography:

My wife and I are both 28. We have been married for a handful of years now. We both have Bachelor and Masters Degrees. We both work FT. We live in a major metropolitan area where real estate is crazy expense. We bought a condo in 2011 and got lucky with the price. Today we pay about $1,000 less per month on our mortgage then a comparable place would be to rent. This helps us significantly in our journey to FI.

Our overall goal is to hit $1,000,000 in our retirement accounts in 10 years starting in Jan 2016. Following the 4% rule, this would give us a safe withdraw amount of $40,000/yr.

Income
My Income: $120,000
My Wife: $92,000
Total Income: $212,000

Assets
Home: $625,000
Retirement Accounts: $89,000
Cash: $8,000
Total Assets: $722,000

Liabilities
Student Loans: $88,214 @ 5.15%
Other Loan: $6,700 @ 0%
Mortgage: $362,847 @ 3.625%
Total Liabilities: $457,761

Total Net Worth: $264,239

For the next year, we plan to max out our 401(K) contribution and also our HSA contributions. We also hope to save at least $12K in our after-tax part of our 401(k) accounts or taxable account. I hope for more than $12K, but I’m going to leave there to be safe for planning purposes.

This means our savings plan for next years will be:
My 401(k): $18,000
My 401(k) Match: $6,000
Wife’s 401(k): $18,000
Wife’s 401(k) Match: $4,500
HSA Contribution: $5,500
HSA Auto Contribution from Employer: $1,000
After-Tax 401(k): $12,000
Total: $65,000


Projecting out, I plan to be saving at least this much for each consecutive year:

2016: $65,000.00
2017: $65,000.00
2018: $67,000.00
2019: $67,000.00
2020: $69,000.00
2021: $69,000.00
2022: $71,000.00
2023: $71,000.00
2024: $73,000.00
2025: $73,000.00

These numbers are conservative as I expect far more can be saved to the after-tax part of the 401(k) account as our incomes increase.

If I assume 5% market return, and that we are contributing to these accounts each month and not all at once, we should hit $1,035,960 at the end of 2025.

Part of the short term plan is to also cut down on spending. I think we are already in a great position, but not anywhere near what Jacob discusses in ERE. We hope to cut down significantly in our spending at restaurants. We also spend a good amount on travel. We don’t plan to cut down on the amount of travel, we just plan to do it all as cheaply as possible. This will come mostly through credit card churning and smart trip planning.

One important part of this plan: we do NOT plan to fully retire at that point. While we do think it will cover most if not all of our expenses, we know we both want to keep working. I just want the opportunity to pursue other money making endeavors such as teaching or maybe starting my own business. We simply just want to be FI so we can do what we choose.

I’m posting this here because I want to get thoughts from you all about my plan. I especially want to see if you all have ways you see I could possible optimize my strategy.

I hope to post updates. I will try to do this at least every quarter.

Thanks,
NE Tom

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Eureka
Posts: 267
Joined: Fri Jun 10, 2016 11:03 am
Location: Copenhagen, Denmark

Re: NE Tom's Journal

Post by Eureka » Sun Apr 16, 2017 3:07 am

Hi Tom,

You had such a great start on your journal. Any updates?

2Birds1Stone
Posts: 60
Joined: Thu Nov 19, 2015 11:20 am

Re: NE Tom's Journal

Post by 2Birds1Stone » Sun Apr 16, 2017 6:17 am

Eureka wrote:
Sun Apr 16, 2017 3:07 am
Hi Tom,

You had such a great start on your journal. Any updates?
Looks like he hasn't logged in since 12/29/2015

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Eureka
Posts: 267
Joined: Fri Jun 10, 2016 11:03 am
Location: Copenhagen, Denmark

Re: NE Tom's Journal

Post by Eureka » Thu Apr 20, 2017 5:47 pm

oh, then maybe not? :geek:

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