Financial Independence Daily FI discussion thread - Tuesday, July 27, 2021 |
- Daily FI discussion thread - Tuesday, July 27, 2021
- Recently FIRED’d and loving it - a public servant’s tale
- Hit 200k in the black this month
- Considering quitting my job pre-FIRE
- Rental vs index fund example (real world)
- Getting my money back on track - A success story
- As an alternative to SWR, why are perpetual withdrawal rates (PWR) not discussed more?
- CharityFIRE
- Is IRA in us similar to PF in India, if so in what way, and if not how do they differ?
- $1mm NW at 29 Software Sales FIRE Journey
| Daily FI discussion thread - Tuesday, July 27, 2021 Posted: 27 Jul 2021 02:02 AM PDT Please use this thread to have discussions which you don't feel warrant a new post to the sub. While the Rules for posting questions on the basics of personal finance/investing topics are relaxed a little bit here, the rules against memes/spam/self-promotion/excessive rudeness/politics still apply! Have a look at the FAQ for this subreddit before posting to see if your question is frequently asked. Since this post does tend to get busy, consider sorting the comments by "new" (instead of "best" or "top") to see the newest posts. [link] [comments]  |
| Recently FIRED’d and loving it - a public servant’s tale Posted: 27 Jul 2021 07:46 AM PDT Three months ago, I gladly pulled the trigger and RE'd from a career in public service and environmental conservation at age 50. Not as early as some in this sub but much earlier than I anticipated thanks to the FI I created through spending less than I made/living without extravagence, paying myself first, a fortunate "make your own luck" situation, some dumb luck, and avoiding major financial mistakes (although I would make a few different financial choices if I could do things over - see below). EDIT: I should have mentioned that the pension's COLA provisions are very weak, currently around 1% and mine won't begin for another three years. So, the value of the pension will decrease over time due to the eroding effect of inflation. Stats at retirement: Personal: Age 50, SINK, white male, Colorado (USA) resident Career: My work has always been environmental conservation through science, policy, and land management, almost entirely in Colorado since college Highest annual salary at retirement: About $138K Annual pension benefit: About $104K Investments: Mix of traditional 401k/457, Roth 401k/457, Roth IRA, brokerage account, HSA. Total value is approximately $350k invested roughly in total stock market offerings (equities, no bonds). Assets: House in MCOL-HCOL area worth about $600K with about $172K owed on a recently refinanced 30 year loan at 2.75%. Career path: Started as a field biologist in college (bachelors in biology) and pursued it for the first couple of years post-college at a tiny non-profit. Decided to leave the hard sciences and move into the social sciences so I could better influence how wildlife habitat was managed. Went to grad school and got a masters in natural resources policy in order to make this career change. While I hadn't envisioned a career in public service (was thinking I'd work for an organization like The Nature Conservancy or perhaps an environmental consulting firm), I lucked into a dream job in state government as a program manager for an environmental issue I was really passionate about. After 6-7 years in this role, I took on some management responsibility for another, larger and related program. At year 10, I moved up into management full-time to oversee all the conservation programs in the department. At year 19, I left state government due to politics (mixed blessing). Within six months, I found a more attractive position in local government at a department head level, up from more of a division manager role at the state. While the work was rewarding and a "Dream Job" on paper, the lack of anything approaching a positive work-life balance and ineffective/unsupportive management from elected officials quickly drove me to reconsider how long I wanted to stay in the position. After assessing my financial situation, I decided that RE was the best option for my health (physical and mental) and the right path to achieve a happier life. So, despite the infrequent question I get from some family and friends, "Yes, I am actually retired and don't plan to look for paid employment in the future." However, I won't rule it out if something comes along that really lights my fire. My "career" moving forward is focused on living life fully, growing as a person, and making up for the last 4.5 years when I worked but didn't live. Financial path: Graduated from college (1992) with about $12K debt in low interest student loans and began to pay them back at the minimum for two years while working as a field biologist and just scraping by. Put loans in deferment when I went back to grad school (1994). Paid for grad school with student loans and working part-time. Graduated (1996) with a total of about $40K debt in low interest student loans. Quickly landed a job with state gov't starting at $42K and began aggressively paying the loans back at $1K/month while sharing housing and flipping a home with friends from grad school. Flipping wasn't very profitable ($17K for 18 months of work - evenings, weekends, and holidays) and, in retrospect, not worth the time deferred from living life (good lesson!). Purchased my own house in 2000 ($234K) in a Denver neighborhood that has only become more desirable over time. Paid PMI until equity exceeded 20%. Started with a 30 year fixed mortgage at 7% but at some point reduced interest rate and term of loan because I was debt averse. Started investing in 401k in 2000 at age 30. After a few years, I was maxing out the 401k (no employer match) by not increasing my lifestyle with each raise but investing instead. Work didn't offer a Roth 401k option and I neglected to start my own Roth IRA until sometime in my 40s. Early on, I built a very comfortable emergency fund and cash reserve that gave me peace of mind when unexpected expenses came up. In 2012, completed whole house renovation for $140K which I paid for with cash saved as well as rolling some debt into refinanced mortgage loan. After 19 years in state service and paying into the state pension (not into SS which means I'll be lucky to get anything from SS), I could see the writing on the wall with the current political appointee department head. Because you can only buy service credit (time served) in the pension system while you are still employed in that system, and rationally expecting that I'd never be employed in the pension system again, I opted to purchase about 7 years of credit (the maximum allowed with my specific circumstances) by liquidating virtually the entire balance of my 401k (approximately $310K). While it was expensive, it turned out to be one of my best financial decisions because it greatly improved my pension value. Over-simplification: the way my pension is constructed, the value increased incrementally from years 0-20 but after year 20, the value of the pension grew more exponentially. Considering that I was almost 46 at the time that I left state service and the pension system, now had acquired about 27 years of service, and could begin drawing a benefit at age 50 (a benefit that would not improve the longer I delayed activating it at age 50), I created a big nest-egg that I would be able to benefit from in only four years time. In a stroke of incredible good luck, within six months I was hired by a local government that had joined the same pension system (a rarity) and at a 16% pay increase. So, I was not only taking on a role with greater decision-making authority and influence, greater opportunity to grow as a leader, etc., but I was earning a larger paycheck within the same pension system which was improving my pension metrics by adding service credit and increasing my highest average salary. However, after a couple of years, I could see a lot of signs that the working conditions weren't healthy for me. At 4.5 years, I retired from this job and my career in public service. Financial optimization: If I could do it all over again with the benefit of hind-sight and a more refined understanding of financial management, here are some financial moves I'd make differently in my life:
Granted, I don't think I made any serious financial errors but I think these changes would have improved my current and future financial position more than marginally. Long-term financial outlook: My pension is currently paying me more than I need to live comfortably and enjoy life. However, over time, inflation will severely erode its purchasing power since I aim to live another 40-50 years. Consequently, I will need robust market investments that grow to yield distributions that offset the future effects of inflation. Because the pension delivers a predictable paycheck and underlying base of monthly financial security, my market investments are currently aggressively allocated. While the long-term security of any public pension is not certain, I generally feel that Colorado has done an OK job of shoring up the pension system and preserving its ability to meet obligations. However, one of the changes recently made reduced the annual inflation adjustment. Consequently, under present rules, present value will not be maintained against inflation. This reinforces the need for investments that supplement pension payouts over time. Pensions may once have been designed to provide entirely for a retiree's needs (and I certainly am benefiting from older, more generous terms than people currently joining the system as new employees). However, this is not practical to expect, particularly as someone retiring at age 50. As an American, it goes without saying that the uncertain cost of annual health insurance coverage remains the largest variable for me for the next 15 years. Sigh… However, I've generally been blessed with good health and have made my health a top priority now that I'm free from the stress of my last job. Fingers crossed. Note: Unlike many here who can manage their reported income from 401k, brokerage accounts, etc., to take advantage of ACA subsidies, I can't do that with my pension. It pays a fixed amount that ensures my annual income will far exceed ACA thresholds and I'll be unable to take advantage of free or low-cost healthcare. I'm not complaining - I'm fortunate to have the income I have. But my monthly healthcare premiums went from a net of ~$10/month for a high deductible, HSA-compatible plan through my last employer to $382/month for a plan through the marketplace. Lastly, I have a great house in a great neighborhood so I will have a meaningful asset to utilize in the future as I age and my situation changes. Philosophical: A persistent theme that runs throughout many posts in the FIRE community is a resignation to a short-ish life of misery working one's ass off at an intolerable job in order to amass as large a portfolio in as short a period of time in order to achieve FI and/or RE. Many OPs bemoan the grind and the sense of worthlessness in what they do for a living. At least, that's how a lot of it comes across to me. My experience has been a distinct contrast to this paradigm/attitude. I've been able to pursue my environmental conservation values through my career for about 30 years. And, I've been able to FIRE at a reasonable age (sure, it's not 35 or 40). At the risk of offending some redditors, I assert that you don't have to take a job or pursue a career in which you find little/no meaning, be a slave to earning as large an income as possible, or sacrifice your life in the short term in order to FIRE. It's possible to pursue your passions, make a difference in the world, and find meaning and value in your day job. I'm proud of my work trying to make the world a better place and was able to FIRE at 50. If not for the poor management and lack of real support from my elected officials at my last job, I'd still be there for another 5 years or so before retiring. It wouldn't have been financially necessary but it certainly would have sweetened my financial situation. However, I'm grateful that my life path and choices (and some luck) led to being FI by 50 (or earlier if needed) so I could leave what was becoming an increasingly toxic work situation. And, it was certainly nice to know I had my FU money when things started to get really frustrating at work. Appreciation and giving back: I've been a lurker on r/financialindendence and related FIRE subreddits. On occasion, I've posted a couple of questions in the last couple of years to help refine my understanding of the mathematics of my situation. More importantly, it's really helped me prepare mentally for a successful retirement by reading the non-mathmatical/mechanical FIRE posts - the ones about how to answer questions from friends/family, develop a healthy structure once the work day structure disappears, etc. I want to express my appreciation to those who've provided helpful information and advice both to posts and on DMs. I'm looking forward to providing what support I can in return and am also working in my own community of friends to support and advise friends who are interested in FIRE or just good personal finance. I also encourage some of the young people in my life to learn the basics (like the power of compounding interest) so they understand what they have to get right (the big rocks) in order to do well. In the future, I'm interested in volunteering through a structured program to provide financial counseling and I'd be interested in hearing from anyone who's doing this in their community. WayTLDR: Fire'd at 50 from a career in public service at local and state government levels. Although I didn't anticipate RE at age 50, attaining FI allowed me to leave my last position which was growing intolerable due to no work-life balance and poor management from elected officials. Now focused on me: regaining my health and fitness, decompressing, reconnecting with friends and family, pursuing my own life. The best I can describe my current situation is that it feels natural! I'm happy to answer questions and have been looking forward to hearing GFY aimed squarely at me! [link] [comments]  |
| Hit 200k in the black this month Posted: 27 Jul 2021 05:56 AM PDT Hey everyone, 29[M], 70K in brokerage, 35K in Roth, 18k in Ally, 77k 401k, zero debts. Mechanical Engineer in N. California. 76k salary. It's my first milestone thread. What's my FIRE number? Not sure. Probably $1.5M in today's dollars. I think I focus less on a number and more about a pace and status, where I can hopefully make working optional sometime in my early 40s. The most important advice I can give is this.. get a longterm boyfriend or girlfriend to pay 45% of your monthly home expenses. So be sure to set aside 1% of your portfolio aside for self-improvement to maintain handsomeness, so you can attract and maintain a high quality partner. Kidding. I mostly own index funds and have had good luck with my stock picks (Microsoft, AMD, Sunrun, Visa). We've benefited from a very favorable market. But one thing I do think that I do well is remain long-term oriented. I try to avoid the arrogance and egocentrism involved in believing that I can consistently beat the market. I try to resist that mental mistake and remember that statistically I won't, and that if I do, it was likely dumb luck. Like Ben Felix suggests, I try to focus on making good decisions, and not mistaking good outcomes with good decisions, like making a fortune by going all in on Tesla options. I think about how in every decade the top companies in the S&P were totally different and that empires fall and entire markets shift. I'm of the belief that 20-30 years of good, risk-appropriate decisions gives one a very good chance of establishing comfortable wealth, and may even outpace the risky trader who gets massive wins but is offset by big losses. Overall I think maintaining an investing mindset of humbleness over arrogance is beneficial for one's wealth and mental health. I don't see my brokerage/roth strategy changing much in the upcoming years. For goals, I have grown to have a sizable fur family and its only my good luck in having a very tolerant landlord that's allowed me to keep them. I would like to get a house of my own, and I'm still at a young enough age I can tolerate a roommate to make some income from. I'd say another thing is don't hesitate to take advantage of stability. I've got a good amount saved, and have been back to work for a year. So my girlfriend and I are taking advantage by taking road trips as often as we can. My advice is recognize when you are in a favorable situation where you can do bold, enriching activities. We've visited multiple state parks in California and Oregon this summer. Our favorite is Smith Rock, Oregon. We're planning on a 4 day trip to fly out to Utah to see Arches and Zion in October. I had another thread last August where I recounted my experiences being fired for two months. I enjoyed the life of training dogs, reading, and exercising. So I'm still content to be on the path towards a more permanent version of that. [link] [comments]  |
| Considering quitting my job pre-FIRE Posted: 27 Jul 2021 12:46 PM PDT (I realize this probably isn't a perfect fit for this sub, so if anyone knows of a better one please feel free to direct me. Thanks!) I've been working towards FIRE for the past several years, with a goal of FIREing at around 57 or barista FIREing at 55. My husband doesn't feel compelled to retire at all. Details into our situation: Me: 38 years old, salary $143K Him: 37 years old, salary $225K We live in a high cost of living area. We have $650K in various 401Ks and ETFs. Net worth: $850K Last week I realized that most of my salary is either going into savings or going to Door Dash or other convenience things we do because time is at a premium with two demanding jobs and a small child (we save $110K/year and spend an unholy sum on doordash trust me...). What I am questioning right now is... why work if we can live within my spouse's $225K salary? It appears that if we can live within those means, if we don't touch our $650K investment sum at 8% appreciation we will have $5.1M. We would likely still continue to contribute to his 401K and things like that, but assuming we just let it ride and don't dip in it appears we will have more than double our $2.5M FIRE figure. All of the other considerations are fine: Spouse is good with me not working and would probably prefer it. He loves working and as a software developer will never worry about having an in-demand job. I have no lack of passions that I am currently unable to pursue. I love cooking and baking when I have the time to do it, so decreasing our convenience purchases wouldn't be hard. We could stop paying for extended school care for our child, as well. Finally, some of my passions may have some earning potential, though I don't want to count on that... I don't want to be beholden to a different job. Although, I am trying not to include this in my consideration an inheritance of $1M+ may come my way (assuming my parents don't mismanage, overspend or live forever - living forever would be delightful... but not expected). What should I be considering that I haven't so far? If I can't think of a reason to pause, my current plan is to work another year to make sure I still feel this way and am not making a pandemic rash decision and to get everything right with our house (build a patio on the house etc.) and then quit my job. If I change my mind or am dissatisfied with not working, I feel fairly confident that I could come back into the work force, if needed, making at least $120K with my education and skillset. [link] [comments]  |
| Rental vs index fund example (real world) Posted: 27 Jul 2021 01:59 PM PDT We have a few different rental properties and have made the decision to sell two of them to hopefully take advantage of the crazy market going on. I'd love to sell the others, but as we've learned it's trickier to sell something with a tenant in it... One property is sold and I've (tried) to evaluate (with 20/20 hindsight) whether we'd have been better to buy it or to put the equivalent amount into VTI. I thought the example might be helpful to people who are considering these questions. The property has three units. It's in a very strong rental market, and I'd say "MCOL" for this region, although the units are lower cost. All three units were rented when sold, and pretty much the whole time. One tenant is behind on her rent (around $1.2k) and the others pay on time. One tenant has an aggressive dog that they got despite having a lease agreement that says no pets. Gotta love tenants. The property didn't show particularly well, the tenants weren't great about cleaning up, and gave us troubles - especially the one with the aggressive dog. Dog crap in the yard, messy units, etc. I found myself picking up dog crap a couple times before showings, the glamorous life of a landlord! In the end we had three offers. One fell through on financing. We had to pick between the other two and went for the cash offer, although it was lower by about $10k. Our main concern was that the other offer would require the bank to do an appraisal, and it was hard to know if that would go in our favor. There were no other properties like this to compare. We accepted the cash offer and ended up going another $10k lower, because their inspection happened to occur during some of the worst rain we've had in years, and apparently there was water in the basement... and a water leak in one unit that the tenant had never told us about. The guy played it up and I can't blame him, we'd have done the same. We debated backing out at that point and putting it back on the market, but were concerned about missing more of the season. I've no doubt that if we could've gotten rid of the two problem tenants (one behind on payments, one in violation of their lease) we could've gotten better offers... maybe. But that could take a long time and frankly we were tired of putting up with them. So, long story short, here's the numbers: Initial purchase price in 2015: $151,000 Sale price (after all fees): $231,000 (this is before taxes) Rental income during the time we owned it: $65,000 (this is after all expenses, but before taxes. Expenses include mortgage payments, which we paid off about a year ago) Profit: $145,000 If we'd put that $151k into VTI over the same period it would now be at a bit over $350k vs the $296k we ended up at. Of course the past year has been crazy and at the time the rental seemed like the best investment. All in all I'm still pretty happy with the investment - we've gotten rid of the most problematic of our rental properties (we have 6 doors in 3 properties, so we've gotten rid of three of them with this one sale) and still made a good profit, although I suspect if I had some way of calculating the amount of time and trouble that we had during that time I may have second thoughts. Hope that helps people. I fully expect the stock market to tank and the real estate market to keep going bonkers now that we've done this :) [link] [comments]  |
| Getting my money back on track - A success story Posted: 27 Jul 2021 01:47 PM PDT In the last 2 months, I have adjusted my contributions. Thanks to some of the guidance from the daily discussion threads, I am on a much better track than I've been. I've been a member here for a long long time, probably almost 10 years under different names, but I don't post much. I've had a goal of FI since I started working in the professional world at age 22. I'm a decade+ older than that now, and while I've socked away a great amount of money for my age, I haven't always maintained the proper focus. Life happens! I got married, had a couple kids, bought a house, changed companies and jobs a few times. Thankfully along the way I always managed to contribute enough to get the company match into my 401k. I've increased my salary year after year. But again, no one is perfect! I was not maxing out the 401k nor the Roth IRA. I did not have an emergency fund. Today - I have done the math and finally adjusted my automatic deductions and 401k contributions to max out my 401k, and my Roth IRA before my check hits my account. I am also maxing out an HSA and contributing another $6000 to my long-term investment account. I'm writing this up because my paystub for my check on Friday shows my deductions after a lot of tinkering, and they are finally spot on. This is a huge step for me, because after doing a little work, digging and asking questions here and elsewhere I feel like I am on the best path possible. This seems like baseline (for now) but it is also sustainable long term. In addition to these automatic deductions, I have also put together an annual budget including our income and expenses. See visual guide below. This shows a FI number of about 1.8-2.5 million (depending on expenses and lifestyle). Using these numbers I will be coastFIRE by age 44, and I am strongly considering changing careers at that time and becoming baristaFIRE. However, when compiling a sankeymatic chart to show my annual budget in visual terms, it seems there are a few discrepancies: "Budget": Amount IN (119,500) ≠ OUT (104,552). Δ = +14,948 "Investment": Amount IN (49,367) ≠ OUT (40,938). Δ = +8,429 Total missing money from budget is $23,377!! This is an enormous amount of money being unaccounted for! Of course, many of my line items are estimations, but there is also a lot of money slushing around, splashing into purchases here and there. AGAIN, I'm not perfect, and this is a great first step to getting my finances back under control. The numbers: Goals : FI/RE ASAP, follow passion jobs without caring about money. Hopefully working with people and with my hands more than I do. 2020 Budget Breakdown: So discussion topics: Is it obvious to everyone but me that maxing these accounts out via monthly contributions is the best way? (took me a long time to figure it out) How has the pandemic and COVID affected your savings? Your spending? I found myself getting back to a lot of financially good habits- reading, cooking a lot at home, not eating out (or even ordering delivery THAT much), enjoying my social gatherings for their companionship and not for the experience of doing something together. I was able to trim a lot of fat (that unused gym membership, bar tabs, etc) [link] [comments]  |
| As an alternative to SWR, why are perpetual withdrawal rates (PWR) not discussed more? Posted: 27 Jul 2021 02:04 PM PDT This is the only article I found: Perpetual Withdrawal Rates Are The Runway To A Long Retirement For a long retirement as in FIRE, PWR seem useful. SWRs tell you how to deplete your portfolio after 30 years -- in the worst case and the worst case matters for planning. PWR or sustainable withdrawal rates tell you how to preserve your (inflation-adjusted) wealth. Much better if you want to keep going for 60 years. Also PWRs have nice properties. [link] [comments]  |
| Posted: 27 Jul 2021 11:27 AM PDT I know Reddit invents a new type of FIRE every day, but hear me out. Wife and I are a few years away from our FIRE number on our current trajectory. We are considering donating 50% of our income to effective charities (food banks, Give Directly, Wikipedia, etc) while we still are earning 6 figures. Donations in my view are more effective sooner rather than later. This would take us down a tax bracket in our high earning years, and stretching our FIRE date a bit is comfortable for us. We like our jobs but are dialing things back a bit. Also, investing early as we have done is the most important step. This should be an option for anyone nearing FIRE but realizing they still enjoy their work, which I think is a number of us. There are a number of unique financial strategies that open up when you donate this heavily. I would love to find a place where this is discussed further. [link] [comments]  |
| Is IRA in us similar to PF in India, if so in what way, and if not how do they differ? Posted: 27 Jul 2021 11:50 AM PDT I know that, IRA -Individual Retirement Account PF - Provident Fund But I want to know how they differ from each other, I've been reading several articles and been active on many good subreddits like those of Fire, etc and see a lot of Americans explaining how IRA benefit theme, etc, I'd like to know if companies from my country(India) have such similar things too, I'm aware that this is very childish but please forgive me I'm just starting out on learning stuff about savings, Financial Independence, etc. Thanks. [link] [comments]  |
| $1mm NW at 29 Software Sales FIRE Journey Posted: 27 Jul 2021 04:25 AM PDT Wanted to share my journey to FIRE and long term plans in case anyone else was curious about options to hit FI fast or FatFIRE without becoming an engineer, lawyer, or going FAANG. For the majority of my career I've worked in software as a service (SaaS) sales. Jumped around a few times and consistently over performed by working long hours, leveraging my team's resources to multiply my work, and getting more gray hair than any of my same aged peers. Lost my job in December after some management changes, took a sabbatical for 4 months, and started a new one about 4 months ago. Last gig was mid-market sales and I was driven to be the top rep. There was a very quarterly driven cadence and I much preferred to work major deals or ones that would feed me in the future. I succeeded, getting rep of the year in 2019, #1 out of 140 with $6mm in total contract value. Then I was fired 8 months later for performance. My 2020 numbers slipped with COVID, what have you done for me lately? The sabbatical put everything into perspective. Rise and grind is a toxic attitude and taking time away from sales culture made me realize I was addicted to working. Sales glorifies folks working on their days off, going to ridiculous lengths to close a deal, and spending your money as soon as you get it. Stories available by request for each. As the saying goes, a sales manager loves when his reps have a baby, a luxury car payment, and an addiction. Taking time off then working from home to get away from it made me like myself more as a person. That said, Sales is absolutely the right career move to get to FIRE as fast as possible without investing years to learn a new skill like coding. I don't regret it. Now taking a much more laid back approach to work since I realized the stress wasn't worth it. New job is Enterprise sales and much more long-term focused. While the accounts are bigger and the problems more complex, it's much easier for me to deep dive learn the business of a handful of companies than dozens. I can make $400k+ grinding 60+ hours per week including Sundays, riding around in Ubers 7am-8pm for face to face meetings, drinks, and dinners, or I can make $250k-$350k doing it from home starting at 8, cutting out at 5pm (3 on Fridays), going to the gym, and getting a good night sleep. Competing to be a top performer is stressful. Chilling out and helping people with the problems they're explicitly trying to solve is not. Goals Retire at 32 so my partner can take an international job which moves around every 2 years and I can get promoted to trophy husband. I'd like to get to $1.6mm before then, but I'd be ok with doing FIREing at $1.3mm since housing will be taken care of by her gig. Game plan is to find a fun job to keep me busy 10-20 hours per week, get more serious about a hobby like writing or cooking, or volunteer. My Story 2014: Income - $30k. Assets at EoY - $5k. Spent - Unknown. Debt - $30k Graduated from an instate undergrad in 2013 with $30k of debt. Spent 5 months looking for a job, eventually landed at a branch of a bank opening business bank accounts ,credit cards, etc. Started mid-year at a salary of $45k + Bonus. Pretty much treading water 2015: Income - $60k. Assets at EoY - $10k. Spent - $36k. Debt - $20k Small raise, left the bank, joined a software company selling data software. Technical proficiency was a big part of the role and I had a background in statistics from my undergrad, but had to learn the basics of selling over the phone B2B. Salary of $45k with an on target earnings (OTE) of $76k. 2016: Income - $115k Assets at EoY - $50k. Spent - $35k. Debt - $0 Small raise, but commission really made a big difference. Used 1 commission check to pay off all of my remaining student debt. Ended up getting top rep of 120, maxing out my 401k, ESPP, Roth IRA, and getting a few RSUs. 2017: Income - $140k. Assets at EoY - $130k. Spent - $38k New job at a Series A startup with the promise of a $365k OTE and a base of $100k. Dun goofed, this was not the right spot and I ended up hating it. After struggling for multiple months I got saddled with the Christian Right Wing vertical where I found a ton of success despite being an LGBT atheist Democrat (political software). Out of the 16 people I started with in Sales only 7 hadn't been fired by the CEO or left because they were morally against what the company was doing. After 2 bosses got fired, the Controller delaying commission checks because "I think you sales people get paid too much," and having to do deal reviews with an operations director who had no experience selling I knew my time was over here. Learned not to work at super early stage startups and all the weird rules of back door IRAs. 2018: Income - $160k. Assets at EoY - $234k. Spent - $40.5k New job at a best in breed company. In my first year win a few accolades, speak at our annual kick off conference, and building a solid book of business for next year. New company offers a mega backdoor 401k, start maxing it out along with the above. 2019: Income - $415k. Assets at EoY - $606k*. Spent: $42.5k Things come together. Close my first $1mm+ deal, then closed another one 8 months later. Tons of accolades, talks of big promotions, and lots of prestige. My partner started grad school so my rent went up significantly.
2020: Income - $340k. Assets at EoY: $880k. Spent - $44.5k Offered a promotion in January, but turned it down for a variety of personal and professional reasons. Tax man cometh, owed 35k in April. Verbally offered a much bigger promotion I planned to accept in July which ultimately a new VP blocked. That should have been the writing on the wall, but I had a rough half because of COVID and was recently let go. That evening a C-suite client I'd been working with texted and emailed me asking if I was ok and immediately offered to connect me with his sales leadership if I wanted a job. 2021: Income: Tracking for $250k, assets today: $1mm. Spent - On track for $45.5k Received competing offers from 2 companies, one a start up and one a well established player. Decided I was done with the stress that comes with building a team so took the established player despite it being $15k less. Negotiated a 4 month sabbatical so I could unwind. Spent that time hiking, reading (up to 43 books so far this year), practicing my hobbies like chess, handwriting (was chicken scratch), working out, and cooking. Travelled a little, spent a ton of time with my family, recorded an interview with my mom about her childhood (favorite part), and visited my partner at grad school. New job is good, though it has it's bullshit. Tax Man Cometh again. Owed the IRS $35k in 2021. Partner got a job that should lead us to living abroad in a few years when I retire. Spending: Tended to live on the road for work so got all of my weeknight dining and happy hours (entertainment or peer coaching) taken care of by the company. Pre-COVID almost all the companies I've worked for provided breakfast and lunch. All the same my partner and I like to do a fancy dinner once a quarter and take out once a week. We've gotten a free vacation from my work 3/6 years which we like to extend. On the years we don't we've done a reasonably priced vacation of about $1000-$2000/person almost always paid for with points. Lifestyle Inflation: I'm a regular at a local watering hole that used to cost $4/beer when I moved here and now charges $12. Rent has gone up because I used to live with my partner but she's in grad school. When I moved here I was paying $750/month, now it's $2,000/month. When I first graduated making ~50k/year I lived on about $32k after taxes. Last year after making 340k I spent $44k. Now that my partner is back I'll probably land closer to $35-$40k per year. Over the last 3 years I purchased 2 luxury watches that set me back a total of $51k. Had both of them assessed this weekend and was offered a total of $74k. Selling on the private market they're worth closer to $93k. These purchases were excluded from my annual spend metrics since they represent one-off purchases and would completely skew the numbers. Overall I could have definitely spent less on food, booze, and toys. Know I could keep grinding at this and have $10m+ after 20 years, but I think 50 year old me would want the 20 years of freedom more. [link] [comments]  |
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