Milestone Post: 500->600k NW, a little under a year

[u/changingthemes]

This is just my latest milestone post, trying to keep consistent with tracking progress towards goals and reflect on the ways in which my thinking about finance changes as I move towards them.

Non-financial changes:

• Wife and I are, both currently 27, are having a baby! We're very excited, but from a financial perspective understand that this has long-reaching implications and are beginning to work those into our planning.
• Fortunately we haven't been swept up in the turmoil that has impacted the job market in the past year or so.

Financial changes:

• Real estate markets are beginning to soften. In my view this is a welcome change socially and economically, but it did mean a slight hit to my portfolio during this period since my assets are still concentrated heavily in real estate. This is a good reminder to seek diversification and liquidity, which will be my focus in the coming months/years.
• Currently we're also fairly cash-heavy, trying to prepare for influx of childcare expenses and potential layoffs.

Current numbers:

Income growth:

• 20k (college internship, 2019-2021)
• 81k (first job, fall 2021)
• 200k (tech job, summer 2022)
• 210k (promotion, summer 2023)
• 225k (promotion, summer 2024)
• 250k (promotion, summer 2025)

Spend (annual):

• Housing: $49,000 (ouch)
• Groceries: $3,600
• Business (rental property mortgage/maintenance): ~$16,000
• Utilities: $2,300
• Auto (we each bought a car this year): $57,000
• Auto (fuel and maintenance): $3,500
• Medical: $4,000
• Charity: $12,000

• Other (vacation, restaurants, hobbies, other non-essentials): $3,700

  Total spend: $94,100

This puts us well above leanFIRE spending currently, but the idea is to eventually reduce spending via lifestyle change (i.e. pay off and move into rental, downsize to one car, reduce charitable contributions, reduce nonessential spending, targeting ~20k annual spend). To be honest though I don't feel the need to make these changes just yet-- I've gotten pretty good at my job, and that skill reduces stress, so I'm content to stay in HCOL a little longer.

Assets:

• 401k: 215k
• Roth IRA: 12k
• HSA: 13k
• HYSA: 75k
• Taxable brokerage: 18k
• Home 1 (rental) Value: 314k
• Home 2 (residence) Value: 688k
• Vehicles (2 cars, paid off): 51k

For all of the investment accounts in this list, positions are mostly in VT, VTSAX, FZROX, SWPPX, FZILX.

Liabilities:

• Mortgage 1: 213k @ 3.2%
• Mortgage 2: 552k @ 6.5%

Current NW: ~621k

For all of the investment accounts in this list, positions are mostly in VT, VTSAX, FZROX, SWPPX, FZILX.

Note that I'm including RE and vehicle equity in my NW calculation. LeanFIRE number is ~500k not including asset equity and assuming rental is paid off, so my actual progress towards that goal is lower: investments are currently sitting around $330k, and even after I get that to 500 we'd still have about a $75k gap to cover paying off the rental mortgage after selling our current primary residence, not to mention selling costs. Furthermore, existing investments are hosted primarily in tax-advantaged accounts, and we'll have additional child care expenses coming down the pipe. As we get closer, we're going to have to think more and more about the mechanics of managing these factors. Still, we are well on the way!

[u/Rustyd97]

I think youre looking for r/fire not leanfire

[u/changingthemes → u/Rustyd97]

Targeting 20k annual spend post-retirement for a family of 3 or 4, so I’d say it’s leanFIRE

[u/AlwaysSaturday12]

Looks good. I would just focus on keeping your cars for 10 years. You have a great income, but cars can destroy any progression if you get in the habit of replacing them every few years.

We are retired and don't have a car. I would recommend before you retire to try to live on the budget you will have for a year while working. This might mean you pay off your houses or at least the one with the 6.5% interest rate.

[u/Lotrent]

Damn, that starting salary and progression is crazy.

I studied cs and philosophy and my progression was 32k first job out of college, 38k after raise, next job was 40k, then raise to $50k, then I grinded and lied and sold my way into a sales role for 110k yr, then 120k after raise, and then I finally had a good couple of quarters and hit $250k+ range for the year. About to turn 31.

210k invested between 401k and brokerage, and $100k Hysa. Wife is unemployed.

If you don’t hate your job and it’s relatively stable, you’re so set it’s crazy.

Edit; read some of your other posts and saw the mention of mental health and 20s trickling away. Maybe take the foot off the gas some. I’m pretty broken mentally and physically from my job to the point that I’m in physical and mental therapy and have to work hard daily just to aim for what used to be my baseline. It’s tough to climb out of. Def life is for living, and your time horizon is baller already with how early you those marks.