Tweet
Before I start, I would like to add that I am scheduling a meeting with a several financial advisors soon but in doing research on my own I found several financial blogs like this one. Without boring you with my life story I will get straight to the point; My wife and I are both 30 years old and make a little over 100K combined (both came from extreme poverty). We have a nice modest home which we remodeled completely two years ago. The home will be paid off in 18 months so when we are about 32 years old we will have a paid for house. We have one 2 year old, drive a nice 30K SUV (paid for), go on nice vacations and eat very well and healthy, dress well and have not debt. We have no debt at all, great satisfying jobs (wife works 3 days a week and I work 4). We feel so blessed because everything in our life seems to just be working out and going great after really coming from war and poverty. Aside from me wanting a Breitling and a Mercedes SL AMG I feel like we have everything we want...We are good budgeters and after all expenses (after we pay off the house) we will have about 4500$ dollars left over to invest. I get a pension from work when I turn 41 years old and plan on going onto something new. The pension will be worth 35K a year in todays money and will keep up with inflation. We plan on both maxing out our roth ira every year until about age 62 and then maybe start to draw from it if we need to. The rest of the about 36K a year I am planning on putting into mutual funds which at 10% a year would equal about 1 million dollars after 13 years. After that it seem like after fees and taxes I could make about 60-70K per year off that without ever touching the principal. Plus my pension plus maybe some part time jobs....did I really just calculate my retirement to be at about 45 year old????? And by retirement I mean a CRAP load of money every year which would finally buy me that AMG and Breitling I have been lusting over.....??? What am I doing wrong it cant be this easy...? Ofcourse I am not crazy, I know the markets fluctuate, kids grom more expensive, house needs change, new cars and emergencies happen but it seems like I am set to win with this???
-
-
Yes, it does. You have made some very smart choices. Congrats. Best of luck to you with your goals in the future.Originally posted by NotNormal View Post
-
It's not too good to be true. It sounds like you both have made some good decisions in life. Keep it up and good work thus far.BrianComment
-
Expecting 10% returns every year is a little aggressive, but it sounds like you have made some good decisions with saving and staying out of debt. I projected my financial independence to be at 48 years old, so I'm a few years behind you.Originally posted by NotNormal View PostComment
-
WHY? What are you hoping to accomplish by doing so? What do you think they can do for you that you can't do for yourself at a far lower cost?I am scheduling a meeting with a several financial advisors
Good for you. That's a nice income, though certainly not anything extreme in today's world. There was just another thread talking about how 100K really doesn't go all that far.My wife and I are both 30 years old and make a little over 100K combined.
Congrats on getting the house paid off so early. That's great. Of course, you do have debt in the form of your mortgage but it's fantastic that you are otherwise debt-free.The home will be paid off in 18 months so when we are about 32 years old we will have a paid for house.
We have no debt at all
A quick search shows that Breitlings start around $4,000. That's a ton of money for a watch but there is nothing wrong with a one-time splurge when everything else is in place financially. On the other hand, an SL AMG costs upward of $150,000 new. I don't know what used ones are going for but I'm guessing it is still a substantial amount approaching or exceeding 6 figures. Sorry, but if I were Suze Orman, I'd have to say "denied" on that one. Somebody earning 100K shouldn't be driving a 150K car in my opinion. Plus, routine maintenance on a car like that is many times more costly than a standard car, as is the insurance cost, so don't forget to factor that in.Aside from me wanting a Breitling and a Mercedes SL AMG I feel like we have everything we want
Just to be clear, you will retire from that job and start collecting the pension right away at age 41 and also go on to a new job elsewhere. Is that correct?I get a pension from work when I turn 41 years old and plan on going onto something new.
This is the one "too good to be true" thing in your post. I would not plan on a 10% return from your investments. Run your numbers based on a 6-7% return for a more realistic projection of where you'll be in the future.The rest of the about 36K a year I am planning on putting into mutual funds which at 10% a year would equal about 1 million dollars after 13 years.
Otherwise, if you can actually collect a 35K annual pension and invest 100% of it for 30+ years, you guys should be in great shape.Steve
* Despite the high cost of living, it remains very popular.
* Why should I pay for my daughter's education when she already knows everything?
* There are no shortcuts to anywhere worth going.Comment
-
Thank you everyone for your kind replies.....DISNEY, you strike me as a "cup half empty" kind of guy but I do appreciate your time. The reason I am wanting to go to a financial advisor is to get some advice from someone who works in finance full time and knows things I do not so he/she can teach me how to make my own choices. Another is that I am really unsure of how/where/when/which mutual funds to buy into yet......I think a 100+K income per year is certainly a very nice income and is "extreme" because we are not the normal couple who lease BMW's, buy boats pretend to look rich to their family and friends when in reality we are hoping to make the next debt payment on time. So yes I do think that our income is "extreme" because we are not "normal" like the rest of the broke "normal" people......Your house comment seems to make you sound like kind of a negative nancy, it was obvious what I was trying to say but anyway......I came to this country with a bag of used clothing in my hand and slept on donated beds for the first 10 years. A Breitling will be passed on to my children and grand children as a family airloom to remember grandpa's legacy...An AMG will just plain and simple be a splurge and a bad investment but its going to happen anyway...And yes I will retire at 41, collect my pension and go onto something new. I do not want to work a lot so my plan is to get a job as a PE teacher. Teaching and my pension will be about 80K per year, plus 30K from my wifes part time income (if she chooses to work) PLUS another 60-80K per year from mutual funds should be feel the need to withdraw that much because we are living pretty damn good as it is on our current income! Ofcourse none of that means anything if you dont have your health, family, positive attitude, serve and help others in life to also become successful...Last edited by NotNormal; 10-31-2014, 11:05 AM.Comment
-
I think you'll find very little support at this site for paying advisors. Thanks to the internet, there is an endless supply of top quality free financial information. That said, a one-time visit with a fee-only certified financial planner just to look over your situation isn't a bad idea if it makes you feel better about what to do going forward. Just stay away from anyone who works on a commission basis or sells any securities, insurance, or annuities. And keep in mind that 70-80% of professional money managers fail to match the performance of index funds so don't be so quick to assume that they know things that you don't.Originally posted by NotNormal View Post
Kudos for that! I didn't mean to knock the 100K income. It certainly puts you in the top 10% or so of earners, and I'm right there with you. My wife and I are also not the "normal" folks who earn that money and have nothing to show for it. Sorry if that came across wrong.I think a 100+K income per year is certainly a very nice income and is "extreme" because we are not the normal couple who lease BMW's, buy boats pretend to look rich to their family and friends when in reality we are hoping to make the next debt payment on time. So yes I do think that our income is "extreme" because we are not "normal" like the rest of the broke "normal" people.
No argument here. Like I said, a one-time splurge when everything is in order is perfectly fine. I have my splurge items too.A Breitling will be passed on to my children and grand children as a family airloom to remember grandpa's legacy.
Teaching and my pension will be about 80K per year, plus 30K from my wifes income PLUS another 60-80K per year from mutual funds should be feel the need to withdraw that much because we are living pretty damn good as it is on our current income![/QUOTE]
I agree. I think you'll be in fantastic shape. If you get a 35K pension, put 11K into the Roths, and put the remaining 24K into mutual funds ($2,000/month) and earn a 6.5% return from 41 until 62, you'll have about $1 million on top of everything else (like the Roths).
Like I said, the only part of your post that I think falls into the too good to be true category is the 10% return and the 150K car. Otherwise, I think you are doing terrific!Steve
* Despite the high cost of living, it remains very popular.
* Why should I pay for my daughter's education when she already knows everything?
* There are no shortcuts to anywhere worth going.Comment
-
I wouldn't count on a financial advisor to teach you how to make your own choices; that is not what they are in business to do. If you want to learn more about the principals of good investing, here is a great place to start:Originally posted by NotNormal View Post
Comment
-
I agree with Disney & Petunia. You are better off learning from other people who have built wealth, instead of people that are selling financial products.Originally posted by NotNormal View PostComment
-
I think planning on getting 10% every year is overly optimistic. I hope it's true because I am in the same boat as far as saving, plan on saving about 41,500 a year. Assuming 5-7& is more realistic but you can't even count on that, at least your pension is a sure thing. Everything else seems fine although personally I would never buy a car that costs more than I make in a year.Comment
-
Welcome to SA where we do our best to stay aware of our spending, make a plan and manage our money; I too am a bit sceptical of financial advisors and see them as salesmen, sometimes wrapped in a degree, trying to make a living. There is little control or oversight, anyone with a good spiel can throw up a sign identifying themselves as an 'advisor.' You've seen the vagaries and the economic gyrations of the past 10 years which makes a smooth 10% return difficult. Just now we are seeing the oil and gas industries getting thumped for geo political reasons. It's great to see costs dropping at the pumps as a consumer, not so great for people like me who live in the heart of the industry whose taxes and royalties pay for our high standard of living and a myriad of services. I fear it will soon lead to layoffs and home values will drop like a rock. It has potential to trickle down through our economy and hurt all the major income producers.
In a downdraft, 10% is an unrealistic target. At 50-60 y/o you will need to be a tad more conservative in your investments and 10% will be difficult to achieve unless interest rates zoom. The other side will be inflation. I was trying to imagine being a PE teacher aged 60. Perhaps if you have credentials to teach an important sport at an important school, you'll negotiate those salary expectations. While I wish you well, life can throw up challenges when you least expect it.Comment
-
@NorNormal - congrats on some great financial choices!
My own father grew up in poverty and lives an upper middle class existence in retirement. Sure, life has thrown a lot of curveballs his way over the years, but nothing will ever compare to where he came from. (& their willingness to happily live well below their means, means there was always enough money for the rainy days, or rainy *years*). I think that perspective will likely keep you grounded and appreciative of what you have. My dad would say that it only gets better.
Agreed with the others on the financial advice. Only you can look out for your money. Be extremely cautious of any outside advice. & that includes free advice on the internet. BUT I absolutely second Petunia's link. Bogleheads is an excellent resource for financial information.Last edited by MonkeyMama; 11-01-2014, 05:40 AM.Comment
-
Congrats on where you have positioned yourself at a pretty young age!
How many kids are you planning to have and do you intend to pay for college? (These are items that have a huge impact on my spending)
I have averaged 14.16% annual 401k returns from 1/08-today.(since I began actively managing my retirement saving) so I don't find 10% out of line. My dad has averaged 32% returns per year since retirement by actively investing/trading.
Contrary to what the majority believe, you can educate yourself and become a successful investor.Comment
-
You like to criticize the replies the post that aren't "Great Job" or "You're awesome". I used to do that, too.Originally posted by NotNormal View PostComment
-
Food for thought about the Breitling: If you are convinced that they are heirlooms to be passed down to future generations who will appreciate them as much as you do, then why not purchase a second hand one for less? If you really believe it is an item that holds value, then an older version should have just as much appeal to you as the current model. (If you want to learn more about millionaires and purchases of luxury items, check out the book "The Millionaire Next Door.")
I concur with the suggestion that you check the Bogleheads forum, but if you really want to consult with a CFP, make it a one-time-only consultation with a fee-only adviser.
Congratulations on establishing a good foundation on which you have a decent shot at building a secure financial future.Comment
Comment