Hey there! Welcome back to My Early Retirement Journey. In case you’re just joining us, here’s a little bit about me. I am a single 30-something, openly Christian, hesitantly immigrant-y, human woman. I love watching TV while eating takeout, and I want to retire early. I currently work as a consultant in a tele-health call center making around $40/hr. I started my professional life in 2015 at the ripe ole age of 31 after a few false starts. I spent 2016 paying off about $10,000 worth of credit card debt. I spent 2017 paying off about $20,000 in private student loans; I still have about $300,000 in federal student loans for which I am currently on an income-based repayment plan for the next 25 years, give or take. I started really getting into savings and investing late 2017 when I stumbled upon the FIRE (financial independence, retire early) community. In 2018, I made the decision to try to save for a sabbatical and maybe if all goes well continue the journey to early retirement. Along this journey, I give all sorts of updates, just like this one.
This is the September 2018 Update of my savings and investments balances, i.e. my personal capital. I don’t call it net worth because my massive student loan debt keeps me at a negative net worth and frankly that’s discouraging.
I am getting a little faster at Excel, so this update did not take quite as long to chart as my June 2018 Savings and Investment Update. We’ll utilize a similar structure here as well. Let’s get into it!
Let’s quickly recall some budget items:
2018 Savings goal: $37,000/yr (2017: no goal)
Monthly savings contributions: $3115/mon
When you add in my Safety Net Fund + Regular Savings and Checking, the amount is a little more.
Am I on target?
Let’s do some quick math together.
My savings goal was to save $37,000 this year.
I finished 8 out of 12 months. So that is (8/12) x $37,000 = $24,667 that should have been invested by now.
Dec 2017 end (investments): 51,333
Aug 2018 end (investments): 83,981
Difference: 32,648 (YTD target: $24,667)
Am I on target? Yes! (this includes interest accrued but still on target)
Notes and trends. Fortunately, I am on target and trending upwards. Praise be! Over the last eight months, I’ve gotten more comfortable with contributing the max to my traditional 401k (after much hemming and hawing at the beginning of the year). I have become a tad bit more comfortable with my brokerage account. Not where I want to be mentally, but I still am funneling extra cash there. So that is trending upward nicely. Like most people in FIRE, all my savings and investment contributions are automated so I don’t see it. That’s the main purpose of having a second bank. I use that to make automatic contributions to my brokerage account.
I don’t really count my checking and savings amount yet. I see that as my safety net fund. Experts recommend 6 months. I went ahead and saved for about 1 year of expenses ($30,000) for a couple of reasons. First, it was a default choice because I had that first 6 months in CDs and I didn’t want to cash them out when I first started investing in Dec 2017. Secondly, I have this fantasy of just quitting my job and in case I do, I’d like to have 6 months readily accessible. I mean I probably won’t, but sometimes humans do crazy things. Also, both my brokerage account and 401k are using my traditional retirement age of 65 to allocate my funds at a risky 90% in stocks. I keep going back and forth, but in short, it makes me feel better to have one year’s expenses on hand. I know the compound interest lost is causing investment aficionados to gasp in horror, but again, I’ve only been investing “actively” for about eight months now. That’s all folks!
Questions? Comments? What about you…have you hit your targets at your Fall check-in?