Just Hit $1 Million NW by 28! The Boring Way: Decent Income & Frugal Lifestyle.
By - aFinancialWreck
Man does eating out add up.
Yeah, eating out has put a dent on my saving goals! With kids, it just makes it hard.
Kudos OP, wish you all the best!
COVID has been a god send for me… I really don’t like the quality of most delivered food, so now I feel like I can make a meal out of anything for my wife and child since I was forced to for 15 months!
Now it feels easier to stay at home vs eating out.
We actually were the opposite! Before COVID we only ate out 1-2 times per month, but now we eat out once per week. Partly trying to support local businesses and partly just wanting an excuse to get out of the house!
But that increase was easily offset because our travel expenses went way down.
I really like this. It looks very similar to my situation. The breakdown of you net worth is about the same as mine, except I am almost 44. Good job! You don’t have any kids do you. Oh there it is you are dinks. :-)
Totally agree. Fast food prices are kinda crazy now anyways. For a shit burger, fries, and a drink - it’s like $8 for the worst thing possible. Easily $10+ for something decent
Yes… and working from home has completely eliminated my interest in fast food at all. I’d rather skip fast food and coffee indefinitely to eat at a local place instead once or twice per week.
No kidding. Fast food used to be cheap and now it's crazy expensive. In the 90s we could go to taco bell and feed the whole family for $10. There were only three sections on the menu and everything was either .39, .59 or .79.
I feel ya. We are very diligent about only eating out once per week on our "date night"...so that helps keep it in check.
And for most people, it's the "big 3" that blows their budget: what you eat, what you drive, and where you live. The reason our budget it so efficient is because we've optimized those 3 things.
* We only eat out once per week and cook all our other meals. For groceries, we don't drink alcohol, we shop exclusively at Kroger, are heavy on the fresh fruits/veggies, and aren't afraid of buying generic brands.
* We've never had a car payment and both drive used cars (\~$5k in value) that are over 10 years old that we bought in-full with cash.
* The total monthly cost for our condo (the mortgage payment, HOA dues, homeowners insurance, property taxes, and utilities) is less than $800 per month. *Disclaimer: We realize this is an amazing deal and most people couldn't replicate this in other markets!*
>it's the "big 3" that blows their budget: what you eat, what you drive, and where you live
This is missing what you reproduce.
Yep, that's the big "1." For some reason it's taboo on this sub, but not having kids is by far the easiest way to FIRE. I could literally buy a new car every year, go out to eat 4 times a week and live in a HCOL city and still be easily FIREd by 40 because I don't have kids.
I was going to say, daycare for my daughter costs more than my mortgage. One year of it costs roughly what I paid for my new car last year. It costs about the same as OP’s 2021 spending!
$800 for housing (I presume in a low cost of living area) *and* ~ $200k household income?!
Clap. Clap. Clap…
We pay nearly twice what you do for housing (just under $1,400 for rent and utilities for a small studio) and have about half your household income.
Apart from that our overall spending is barely more than yours, so $30k or so seems to be the “efficient frontier” for a couple’s spending.
Yeah, $30k is definitely our efficient frontier. Spending any less would reduce our happiness and quality of life. But spending any more doesn't really bring us any additional happiness at this point. We still buy anything we want whenever we want and still end up around $30k.
Are you still in that 435 sq foot condo from
your last posts?
Yep! Probably going to be here for another 2 years. Then going to buy a bigger house and have a couple kids!
We are kind of surprised we didn't go crazy staying home in our 540 square foot apartment during the pandemic. 435? Props to you guys.
Definitely get a bigger place with bedrooms before having kids haha.
So happy you all have a great start. Kids are expensive!
How did you find such a large network of like minded people? I recall when we went to one vehicle for a time, we got so much flack about it, mainly from family. No one could understand why we would do such a crazy thing. And, they only see a small window into our financial decisions.
It didn't happen overnight! It has happened very slowly over the past 5-7 years.
We went to a top-tier engineering school, so most of our friends are high-achieving, high-income, type-A personalities that are naturally frugal and efficiency-minded. So I think we were just lucky to have a lot of people around us that were naturally "predisposed" to FIRE.
As we'd meet new friends, we talk about our futures/goals and naturally FIRE would come up. It definitely doesn't resonate with everyone, but most people tend to be really intrigued...and then many of them get obsessed once they do some more digging!
Marrying the right person helps too!! My 1st husband (whom I was married to only a few years in my early 20’s) is still struggling with debt and a paycheck to paycheck lifestyle 20 years later... I don’t know why but he volunteered that info. So my point is, some of us start off rough, but learning from mistakes and recovering is very important too and never too late to make a better future!
Any plans for kids? My wife and I were like you two, but once a baby comes your expenses start to creep pretty quickly. Bought 3bd condo (had 1bd), bought larger, newer (safer) car, and daycare ($2100/mo!).
Yes, big time! Our entire motivation for FIRE is that we want to be as financially secure as possible before having kids (and we want to be able to take a step back from our careers once we are parents). In a few years we plan to buy a bigger house and have a couple kids. Our expenses will more than double once that happens, which is why we're trying to save so aggressively now!
You'll be fine. My wife and I did somewhat similar to you. Hit our first million around the same age, then had a kid when we turned 30. The savings continues growing at a disgusting rate with this near continuous bull market we have been having since 2009, so we have significantly increased our savings even with the added expense.
Man I'm glad that I don't want kids. I'm sure it's all worth it if you do though.
Seriously. Not having kids is a cheat code for FIRE
Yeah it is definitely worth it. I just didn't really realize the impact it would have to our FIRE plans. Even worse is that now my wife is itching to stay at home with the baby (was never the plan for either of us) so that'll drop our income by $100k.
My wife stayed home for 9 years with kids. It was worth it. You could say we are probably down 1m net worth because of it but I don't really care. I had time to focus my career and make more during that time. Now that kids are getting older I'm burnt out and she's ready to re start her career so we are switching places.
I’m too selfish for kids. Zero desire.
Moving out of CA is definitely on my mind because of the COL. I pay double in RENT for 1bd / 1bt.
Keep it pushing a good luck in the future.
I wish I could move out of CA, but until I can figure out how to change careers, I’m more or less stuck here due to work.
I'd move out of California but then everywhere else 'nice' is also expensive, I'd get paid worse, the weather is worse, and living here has meant dealing with the least sexism I've experienced in my life.
Yeah. Moved to Cali from the Midwest, never even glorified or cared about the state before I lived here, only moved because an opportunity popped up. But man. The California dream and California lifestyle is very, very real and I never realized just how much life I was missing out on being settled in the Midwest. Still here, still more than happy to pay the California lifestyle tax. It's hard to understand just how much better so much of the state is between the people, attitudes, lifestyles, weather, nature opportunities, job opportunities, connections you make, etc vs so much of the US until you're in the thick of it for a couple of years. I mean, the state as a whole doesn't even feel real humidity and there's almost no flying insects even. It's a little eerie.
But I am frugal in other ways. Some people are happy to save money living in a LCOL area but a good sized house, I'm more than happy with a modest apartment or having roommates and paying less but not own a home (yet - once you can afford a home here though you can easily skyrocket net worth or get the 2nd or 3rd property since your 1st property is worth so much). Also being gay knowing I won't have kids means that entire cost/square footage issue doesn't apply helps.
I think a lot of smaller places are overlooked because people don't think they're 'nice'. Check out NC. It is cheap and very nice.
Is $1600 bad for a 1BR? Sounds super cheap especially if you make CA tech money. Also if you have a spouse to split it with, it's only $800.
Thank you for your note on housing! Good on you for getting such a good deal, but I appreciate you acknowledging that that is insanely low for an area that offers salaries like yours.
We’re in a MCOL area and live in a modest older house and our costs are twice yours. We could find something cheaper (at least before the market went nuts), but honestly, not by much. I was paying $750/month in rent for a 300 square foot apartment and that was considered a deal!
I eat out. My food budget is like $1k a month.
Been this way for a decade. It boggles my mind sometimes.
God dang dude I thought I was ballin when I go over 300
Same here. I just can't motivate myself to spend my free time cooking.
I can’t motivate myself to get in the car and drive my ass down to some restaurant *every. Single. Day.* It’s bad enough needing to grocery shop twice a week. And then all the time spent waiting around while they cook your food and bring it to you, ugh. To each his own!
I mean... delivery and takeout exist hahaha
That jump from $360k in 2019 to a mil now is insane. You had to have invested ~$125k in each of those years or so.
Even with the $30k annual expense and paying some taxes, $125k doesn’t leave room for much expenses and my plain math says it’s hard to have $125k surplus from a $170k yearly salary?
Also interested in this. 170k is around 120k after 30% taxes. Minus even 20k expenses is still only 100k of additional principal a year. Seems crazy that they nearly tripled their NW in 2 years without that much of an additional cash injection.
Maxing out pre-tax accounts helps but I think the math is still quite tight based on income, budget, and expense. And none of it is crypto. Definitely crazy gains between 2019 to now.
With 19K going into each of their 401(k)s, and 7K going into their HSA, their effective federal tax rate is probably only about 7% or 8%, with their marginal rate at 22%. They probably paid about 13K in federal taxes.
To help you work out the math, the key to saving so much on a relatively "normal" salary has been two things:
1. Very low expenses, as you already mentioned.
2. Maxing out all of our tax-advantaged accounts. Even though our gross income was $170k, we put \~$50k per year into our Traditional 401ks and HSAs to reduce our tax burden. So in reality, we're only taxed like a couple that makes $120k.
Hopefully that is helpful.
Wait, do married couples get to put more than $19,600 per year into 401(k)s? I’m curious how people are able to put much more than the limit cap I’ve been told about by HR. How....how does one get around the limit?
Edit: re-read OP’s math breakdown—I accidentally overlooked the HSA part. Thanks guys :)
Her 401k, his 401k and HSA is like $46,000. It's not a married thing.
Yeah, I gotcha. Others told me that it includes the HSA—I overlooked that when I was initially reading OP’s math break down, so I went back and re-read it and now it makes more sense.
Some plans do allow for a traditional After-Tax 401k contribution, which can then be converted to a Roth 401k. Not every plan offers this, and it's capped at $58,000 of total contributions (employee + employer contributions).
I read that as $50k was including both 401(k)s AND the HSA. So $19,600 + 19,600, then approx $9-10k in the HSA to get to his “~50k” number
Two high income earners can put in like 110K+ each year in their 401Ks through mega back door roths alone.
While true, this is not a possibility for probably a majority of the people.
We're not even halfway through the year, and from what I can only assume it's Jan-01 to now, NW has gone up by over $200k in just about 5 months!!!!
Yeh I'm not sure what they invested in or if they just heavily front loaded investments because thats way above average returns for the first 5 months of 2021. Invested in 100% in SP500 would have gotten you only to $913k
Yeah, those early years of just piling in principal were HUGE. We still have few more of those years left and we should hopefully be set for life.
And yeah, we've been saving and investing $100k+ per year for the past few years now.
>And yeah, we've been saving and investing $100k+ per year for the past few years now.
>Having a like-minded SO
I think this is probably the key part of your journey thus far. Agreeing on the level of frugalness is very crucial to a relationship. Two people can have very different opinions on what saving vs spending money means to them.
Amen. Not only is having a like-minded SO the key my FIRE journey, but it's the key to my life and happiness journey. Without her, none of this would be possible.
I really appreciate that you're so mindful of how this is a journey that you take as partners, and each of you are equally contributing to getting to FIRE. It's really refreshing to hear how how kindly you talk about your spouse :)
We are so lucky to have each other. Humans are social creatures and relationships are EVERYTHING. It's the single most important factor in determining happiness, yet most people spend more time worrying about their career and their finances, rather than their spouse. \*steps off soapbox haha
But yeah, we're high school sweethearts who have been together for over 10 years, went to college together, starting living together 7 years ago, bought a home together 4 years ago, and got married 2 years ago...and after all that, it *still* feels like we're in our "honeymoon phase"!
I like how you think. And I feel the same way about my husband :) We're a team, always.
Congratulations on creating al of this with your SO. You both are truly blessed :)
Right, plus the simple practical expedient that it costs way, way less for 2 people to live together than for each of them to live apart. If both were on FIRE track to start with, then the resulting reduction in living expenses implies an even better savings rate even if they splurge on a wedding and honeymoon. I just need to find the right lady who is really into safe withdrawal rates.
Just being married and having both partners working, period. Much easier to accumulate wealth with two people adding to the pile.
Did you guys graduate with any student debt?
Doesn't seem like it if they were able to max out all the retirement avenues from the very beginning.
No, we covered that in the previous post that was linked at the beginning, so you could go check that out to get all the nitty-gritty detail.
But long story short, we both went to an top in-state engineering school that is notorious for its amazing "value" (relatively low cost of attendance and high average starting salary upon graduation). I was one of a small handful of incoming students that got a full-ride academic scholarship due to my test scores and high school activities. But in addition to that scholarship, I also worked 3 jobs (dorm RA and two high-paying part-time internships) and had almost no expenses due to my scholarship...so I managed to graduate with no debt and quite a bit saved up. On the other hand, my wife received a smaller scholarship that covered her tuition and she also worked 2 jobs (part-time on-campus job and a high-paying engineering co-op) and had very low expenses. She also graduated with no debt and with a decent amount of savings.
Obviously there is a lot of luck and privilege in that story, but that's the quick overview.
> Because of this, our 15-20 closest friends are all into FIRE as well. We hang out with friends 1-2 nights per week, but instead of "going out for drinks" (we don't drink alcohol anyways...) we go over to each other's homes for home-cooked dinners and board games. I say this because we have a good social network, but don't have to spend a ton to maintain it. Having a like-minded SO and like-minded friends have been two of the most important contributors to our happiness and high savings rate.
THis is really amazing and I'm happy for you. Not only does it sound like you've got a good sustainable early retirement ahead of you, but a long life brought about by a good social network and friendships.
The craziest thing about this was having 15-20 close friends.
Haha! We're pretty social and have been lucky to develop a really great network of people we love.
I birthed my network of friends and it’s costing me a fortune 😂 #noregrets
I got about 5 and whenever I talk about FIRE, they slap the back of my head :/
> The craziest thing about this was having ~~15-20 close~~ friends.
No kidding 😂
Who share the same interests, even!
> Because of this, our 15-20 closest friends
FIRE is a lot easier with 0 close friends over here.
For sure! That's why when I see people on this sub say "don't ever talk about FIRE", I get sad!
We certainly don't talk to most people about it, but we try to be open with the people that we care about and those that we are really close to. Sometimes it resonates with them and they also get super excited about FIRE and other times it doesn't and that's fine.
Congrats on your well earn accomplishments. Your numbers are pretty close to mine except I am you 3 years from now. If you continue on the same path as me, in the next 3 years you would be making babies and growing to $1.75M.
I'm 33 so you are 2 years ahead of me age wise because it took me working a few years to realize how much I hate it and that I wanted FIRE. I'm very impressed as to how to were this financially savvy right out of college. I was late to the game on a lot of uncommon personal finance knowledge like:
* Stock picking & market timing = bad. I was a terrible market timer.
* I didn't know I could drain retirement accounts before 59.5 so I didn't max them out the 1st year.
* I didn't know HSA's could be used for non-medical expenses after age 65 so I used FSA's instead
* I mistakenly avoided the credit card game until after I bought my house so still don't fully understand what miles do. I'm starting with cash back cards like Chase Sapphire Preferred because at least they have cash back since being limited to a few specific airlines makes vacation planning complicated.
Your path is that I would have followed if I was as smart as you coming out of college. My only difference in finances is that I have a 15y mortgage instead of 30 because I'm slightly more risk averse.
Your spending is very impressively low. $21K is what I spend on housing/bills alone without even including mortgage principle. But maybe I could pull it off if I didn't live in Boston.
The most impressive stuff here IMO is the $2-3k monthly spend paired with the thorough happiness with their life coming through in the post and comments.
Good for OP, most people that manage this level of savings, by spending so little, vs. having hilariously high incomes, come here and grip about depriving themselves. You couldn't be further from that tone.
Yeah, I'm incredibly impressed by their low spending. My "essential expenses" bare minimum tally that I put together is $35k/yr, and there's only one of me! If there were two of me it'd be another $5k in groceries alone! But I guess that's just LCOL areas for ya.
Congratulations on 1mil!! Your chronological breakdown is also really comprehensive. Documentation and tracking is just \* *chef's kiss \*.* I wish I had found out about FIRE earlier in my career (I'm 30), because it has definitely changed the way I looked at my spending and my life holistically. Thanks for sharing your story, it inspired me to keep going. Decent income and frugal lifestyle ftw!
Ha! Thanks! We've been really diligent about tracking everything since we discovered FIRE back in 2013.
I've always loved it when other posters have laid it out this way, so I tried to follow that same format. Seeing the year-over-year change it net worth, income, and spending is always one of my favorite things because it allows me to see how we're doing compared to others.
Man, you hit the jackpot. Finding a spouse that is FIRE is hard. Finding a circle of friends that are FIRE is next level. My absolute closest friends can't understand how I'll be able to retire in about two years. They totally understand taking out a seven year note for a car but someone retiring at all...unthinkable. It's like Aliens landed level of confusion.
It's a shame b/c as you get close to FIRE -- I'm not quite there -- the freedom you feel is tremendous. I don't have to do anything I don't want to do and I can do anything I want to do. That is freedom/power/privilege. I can only imagine how great it'll be to have my "FU" power at 100%.
Love these posts. Wish there was a way to filter them. I've been into FIRE for a long time but being single I've yet to find a lot of examples of someone who did it 100% solo/one income.
I own a modest 1,600 sqft home and pay $2,400 a month (Mortgage, Insurance, Taxes). I reach your annual spending in less than 9 months of strictly home payments.
If it makes you feel any better, our one-bedroom condo is 435 sqft. :)
Smart, humble and hard working. Good for you and your wife OP.
Go fuck yourself :)
Sames. OP must live in like a shoebox or something?
You make my numbers look like shit.
Started working in 2014 with $18k debt and $4k in the bank.
29/M/SINK. Low cost area.
2021: $33k YTD
Net worth: $392k
Are you kidding me?! Those are some impressive numbers! My income has only exploded in the past 3 years and that was mostly luck and being in the right place at the right time.
Also, dude, you net worth is super solid! You'd be approaching $1 million right now if you had a SO with similar numbers like I do.
You're doing awesome man. Comparison is the thief of joy. There are plenty of people out there doing way better than both of us!
I expected to see a much higher household income. I am such a failure at budgeting.
This is fantastic, and go fuck yourself.
That is a very high income depending on where they live. And it jumped each year by a lot.
It wasn't until I was 28 that I even had a salaried job. And that was a teacher at 40k per year. These people got the jump start by comparison.
This is how it’s done. Also, huge fan of the humble brag posts. It’s motivating for me to see the numbers jump as you accumulate.
Thanks! And yeah, I've always loved it when other posters have laid it out this way, so I tried to follow that same format. Seeing the year-over-year change it net worth, income, and spending is always one of my favorite things because it allows me to see how we're doing compared to others. Glad it was helpful and motivating!
Is income before or after taxes?
All incomes listed are our gross incomes before taxes are taken out.
If a couple has a NW of $1M does each have a NW of $500k or are they both considered millionaires?
Congratulations! Don’t let my philosophy throw shade on your accomplishment.
they're a millionaire couple.
conversely, if I have 500k on one day and the next day I get married to someone who also had 500k, did my NW just double? yes and no lol. the household NW is twice as much, and you can argue that expenses will go down, but the expected returns per person didn't change
Yep. This is part of the incentive to have two people (and thus two incomes). What marriage does is provide social, legal, and tax benefits to both persons.
There are other benefits too. Many elements of the tax code and tax shelters are in a sense joint. For example, married filing joint doubles the tax brackets up to fairly high incomes, both spouses can contribute to IRAs even if only one of them has income, etc. meaning it doesn't matter where the income comes from.
Most of the articles you see online about average and median net worth, income, etc. reference household figures, not individual figures.
The other side of the coin is that single income households have it way harder on all kinds of financial metrics. Think of someone in an upper-middle class job making $75k per year. That's pretty good, right? Another person making $50k might think about all the things the $75k earning person can buy or accomplish financially. But, if the $50k person marries another $50k person, suddenly they are (collectively) better off than the $75k single person, because although their expenses are more than the single person's at a given standard of living, they are not double. Plus, the overall career/income risk is lower, because it is diversified across two people rather than one. Yes, this is obvious and not at all insightful, but the point here is that just having two incomes is massively beneficial, even if they are modest ones.
A married two-earner couple can pile up more wealth faster than a single person several rungs higher on the socio-economic ladder.
TLDR: Married households can count assets and incomes jointly. Single-income households face greater challenges.
Just one point, about risk diversification due to two incomes - my understanding is that dual income households are actually more likely to be foreclosed upon. This is due to them, on average, buying a house they need both incomes to afford, but as a household, being twice as likely to experience a job loss.
The main point stands, dual incomes are beneficial in lots of ways. However, my wife and I made sure we bought a house we could each afford on our own, just in case, but most people buy pretty much all the house the bank tells them they can afford.
This. It does not nor should matter if married as you become one entity under the law of money.
Financially it matters. If there are two people, they both need to eat/live off the money.
Depends on your estates divorce and intestate laws. 😂
But from a healthy relationship perspective, I’d say your partnership has $1m
Me and my spouse are closing in on a $1M NW this year (probably need another 5%-7% gain out of VTSAX), and we will both be counting ourselves as millionaires.
Not to rain on your philosophical parade with legality, but I’m in a state where martial assets and debts are shared jointly and equally. So under the law we would both be millionaires, if we were to divorce we would both lose that status.
$500k each imo, unless a prenup dictates otherwise.
It guess it depends on how you structure your relationship and view your finances. My husband and I have fully combined finances and a very stable relationship, and we would view both of us as millionaires. We each have full legal and emotional(???) ownership of that money while we're married.
I wouldn't consider myself a millionaire until I had 1M alone.
Good post. That’s a crazy ramp up starting in 2017.
Dual income really helped kickstart the whole process.
Two incomes and no kids is so easy it's not fair.
I wouldn’t say it’s easy or unfair. Lots of couples struggle financially even without kids. If OP and his wife spend every dollar they made or bought things on credit there’s no way they could have gotten to $1M NW before 30.
They do make significantly more than the average household though. That is a huge factor.
Dude I live on $17k a year with no kids; it's easy lol.
I mean I lived on less than that when I rented a room plus utilities for $350/mo. Now I pay that much for home insurance and HOA alone. Anecdotal evidence is just that. No one is arguing that living alone with no kids is a lot cheaper than the alternative. Just because you can live cheaply that doesn’t mean others don’t struggle.
Yep! That's the year my wife graduated college and we finally had that duel income working for us.
Curious what index funds?
VTSAX (Total Stock Market) and VSMAX (Small Caps).
It looks like you switched jobs in 2021, is that accurate? What kind of career?
Wife and I just started this journey and are pretty frugal regularly, but follow I Will Teach's Ramit on living a rich life of spending on what makes you happy while doing the basic investment strategy.
Yes, I received a promotion into a new role, but I actually stayed on the same team. In my previous role I worked in a "support" role for a software platform that my team developed and manages. But last year I moved into a "sales" role on the same team and received a considerable raise to do so. So now I sell our software platform to clients.
Weirdly, I actually still work at the same company that I joined when I graduated college, which is pretty rare for my generation.
how are you finding the move to sales? Im tempted to head in such a direction but with a kid and a chronically ill wife I'm a bit worried there will be too many conflicts compared to an engineering role
Great post, OP. You seem modest and humble - love that you’re helping your friends, and wish there were more high school teachers like you. My unsolicited .02 - have those kids sooner rather than later. You have a great partner, financially stable - just go for it - you’ll figure out the rest as you go (eg that bigger house), and I’m positive you’ll love being a dad. Thanks for making my day with your post and comments..
The timing of your investment history is very fortunate, perfect timing to ride the recovery and bull market after the Great Recession. (Edit: that’s probably not entirely fair, most of your gains have come in the past couple years, well done, OP)
Credit to you though for saving consistently and living within your means. Most people fail at that, whether they will admit it or not.
Your point about having a SO who is on-board is spot on. I’ve known people who should have been able to achieve FI, but could not because the one of them was a spender.
Great progress and love the updates!
As a physician who took a traditional path straight from undergrad through residency and was practicing by age 31 (younger than many), it is very striking to see someone hit that financial milestone a whole decade before me (I'm now 37 and just hitting the same financial landmark). Just something for others to consider as they look at career paths that keep them out of work and building debt during a time of your life (20's) that many of us are able to keep lean. It's a lot harder to be frugal when kids enter the picture. Keep it up, look forward to more updates in the years to come.
Getting a good partner early is such a blessing. Congratulations man, my best wishes for your future.
Thanks for sharing this. I've been debating whether to share my own journey for a while and but feel like it would be too humblebrag-y to post. I feel like we share a lot of similarities (with SO since high school, one business and one engineering background, don't drink alcohol, and enjoy board games, etc.) despite other big differences (living in HCOL being the biggest one). Anyway, one thing that stood out to me was our net worth trajectories that line up pretty well so I thought I'd share here.
Net Worth (Yours vs Mine)
Year 1: $264k vs $240k
Year 2: $361k vs $350k
Year 3: $536k vs $550k
Year 4: $794k vs $770k
Income (Yours vs Mine)
Year 1: $141k vs $120k
Year 2: $159k vs $140k
Year 3: $169k vs $195k
Year 4: $197k vs $235k
Holy CRAP! That is amazing. Y'all must be super frugal as well if you can make it happen in a HCOL area.
You should definitely share a post with all the details about your journey! The more detail the better (see my two previous posts linked at the top for reference). Those are my favorite things to read on this entire sub and obviously a lot of other people agree...it's why this post is currently sitting at over 1,500 upvotes. Lol.
What are some of the other biggest differences/similarities that you've noticed in our approach?
Wow great job! That’s an incredible savings rate.
You’re actually making me feel bad about my own lack of frugality. I also hit $1M this year (same age) but my income is 3x yours. I clearly need to learn from your great frugality!
Thanks and congrats to you too! And nah, don't feel bad! We all have our own way of getting there and that's the fun part!
Don't let anyone in this sub discount you or make you feel less special for having that high income. Most people love to praise frugality, but having a high income isn't celebrated as widely unfortunately. There is a lot of hard work that goes into that and most people don't understand.
I’m curious on what you and your SO do for a living. Was there a job change between 2020 and 2021 to contribute to the $23k increase in income?
Thanks for sharing. I love these posts.
We both work for two different Fortune 500 companies in project management-type roles. My wife's job is much heavier on the analytics side of things and mine is much more sales-oriented and client-facing.
And yes, in 2020 I received a promotion into a new role, but I actually stayed on the same team. In my previous role I worked in a "support" role for a software platform that my team developed and manages. But last year I moved into a "sales" role on the same team and received a considerable raise to do so. So now I sell our software platform to clients.
Weirdly, I actually still work at the same company that I joined when I graduated college, which is pretty rare for my generation.
You two are killing it. Fantastic job.
Pursuing FIRE with a similarly-minded spouse is a massive edge. My wife and I are largely the same as you and have ended up with fatFIRE assets and a leanfire budget. It's a nice, but sometimes weird place to be.
That's awesome to hear.
Would you be open to sharing how old you are and what your current net worth and annual budget numbers are? I'm super curious to know where we might be at one day.
Sure. I'm 43 and my wife is 50. We FIRE'd six years ago when I was 37 and she was 43. We've got four kids in elementary through high school.
We're probably worth a bit more than $3M (fatFIRE for our lifestyle/MCOL, more regular FIRE in a VHCOL) and our annual budget thus far has fluctuated between the low 30s to low 40s, which puts our WR somewhere around 1.2-1.5%. The numbers shift back and forth with the market, but we don't track the numbers too closely anymore since it's sort of academic at this point.
We could easily be growing our NW faster, but we've got a fairly conservative index allocation and don't see the need to take on any additional risk since we're already likely to leave a full FIRE inheritance to each of our kids. As with you, we built our assets using nothing more than index funds and routine contributions.
That is amazing. Thanks for sharing.
You've been able to keep your family's annual budget in the $35k-45k range? If so that's awesome. Especially with a fatFIRE lifestyle! Does that include a paid off house?
Because we're still young an don't have any kids, our big "unknown" is how much our life will cost once we move into a bigger house and have a couple kids. My estimate has always been $60k, but I don't know if that is too much or too little.
Thanks and you are welcome.
We definitely are not fatFIRE lifestyle, just assets. We tried a fatFIRE lifestyle for two years and pretty much hated it, so we went back to our natural lean ways.
Yes, we paid cash for our house in prep for FIRE. Not having a mortgage has turned out to be a huge win for us financially, but we would likely have done it anyway for the psychological benefit. We're big believers in reducing sources of stress whenever possible, no matter how small.
Our original FIRE budget was for around $90K a year, based on the estimate that half would be core spending and half would be for health insurance/healthcare and mortgage servicing. We eliminated the mortgage by paying cash and the ACA eliminated pretty much all costs for health insurance and healthcare. We still mentally peg our core spending in the low-to-mid $40s, but each year we end up with various amounts of cash left over as our real spending is usually in the $30s. I figure it will just result in us skipping a withdrawal once or twice a decade, sort of like a financial leap year.
Indeed, with the all of the COVID stimulus (direct payments, huge child tax credit rebates, two years of free ACA coverage) we haven't had to actually take any money out since 2019 and probably won't need to until summer of next year. We're still doing conversions to maintain our ladder, but we're not actually withdrawing any money recently.
Wow that a perfect set up y'all have. I feel like I'm talking to an older version my myself!
Super awesome to hear all those details. Thanks for all that additional info!
Thanks. Your accumulation ramp up is way ahead of where we were though. You're gonna be Scrooge McDuckin' it in your money in no time.
Not to mention your huge group of FIRE friends, which is something that is virtually unheard-of. All of our close friends know we are FIRE'd and have asked various questions about it, but none of them have any interest in pursuing it themselves.
Congrats. Absolutely boggles my mind that it's possible to go from 55k to 121k in 6 years. I thought people only made that kind of money after putting in decades of work. (unless you open your own company that does really well). I'm 28 with about $13k CAD in the bank now kicking myself for not picking a lucrative field earlier in life and just doing it.
It boggles my mind as well! I never thought I'd be making six-figures. If you go back and look at my "FIRE Spreadsheet" that I created when I graduated college 6 years ago, I only forecasted an annual raise of 3% each year...so I've definitely blown those expectations out of the water.
It's been a combination of being a top performer, but also being in the right place at the right time.
Interesting to see that I upvoted the 300k milestone years ago and missed the 500k update. Very nice work! Can't wait to be there one day. Only question; are you still living in that Condo you bought years ago? Do you have plans on renting it and getting a bigger property? I'm in the market for buying a condo and would like to see what the plan would be for someone similarly aged! Thanks!
Congrats you two should be extremely proud of yourselves! You’ll be worth 8 figures at retirement age without having to invest another dollar! That alone should be so freeing you can design your life however y’all want being so young
I love "boring" stories like this. Thanks for sharing!
Proof that good money habits and disciplined investing pay off in the long run. Congratulations OP!
Ok now its time to try mushrooms and acid and goto burning man. Go party with the big boys cus ur on easy street. Bogle heads and ur gucci
there are actually a surprisingly high number of FIRE minded people at festivals ;)
Oh absolutely, its basically run by billionaires and millionaires. I camped with a godaddy founder. Built a massive structure of his own dime
Congrats. But let’s all keep perspective - $197k household is not “decent income.” You made all the right, smart, conservative moves - but part of what helped generate your wealth was a far higher than average income even in the leaner years. You got to where you are by living frugal, delaying gratification, making smart decisions, and generating a very high income.
I'd say $197k household income is more than decent, especially when it's not in hcol city.
Very, very nice
I am married with two kids, 34 - got lots of crap, big house and cars - somehow managed to turn $700 k Nw Into 1.35 in the last 1.5 years.
Series of small, thoughtful decisions makes all the difference- keep that momentum up! Don’t forget to live your life either ;)
The market has been absolutely bonkers over the last year so I think most people are in a similar boat. Not necessarily the numbers, but the return rates.
Let’s hope it all doesn’t come crashing down with hyperinflation now 😉
Income? I like the fact that you have nice stuff and still saved a ton.
Killing it, great shit dude - Best of luck for the next million.
Your last bullet point is almost verbatim what I’ve told friends when they initially found out about our savings rate and would mention “make sure you don’t forget to live a little.” Well, we are, but we spend on experiences instead of material items and don’t shy away from things we want, we just happen to not want much. Having a spouse on the same page is the other key item. Great post, thanks for contributing to the community.
Damn, the 2019 to today jump is insane! Do you plan on trucking on or increasing spending a bit? Are your friends in similar socioeconomic situations? 2 of my friends are aware of my aspirations, but the remaining are not.
Yeah dude, that was a crazy year! We plan on keeping expenses pretty similar for at least another 2 years. But after that we plan on buying a bigger home and having a couple kids, so we expect our annual spending to be around $60k after that.
And many of our friends are on similar paths. If you can believe it, we are really close to two other couples that actually are head of us in terms of age and net worth! And about a dozen other close friends are all on the FIRE path, but not quite as aggressive as us. Almost all of those are in their late 20s with net worths above $200k.
Wow, when I saw that steep NW climb after 2016/2017, I was confident that you were gonna say how you invested in crypto. But no! Congrats, this is seriously impressive.
Nope, no crypto! But I'll be honest, sometimes I feel the tiniest amount of FOMO when I hear those crypto stories, but then I slap myself and remember the time-tested, low-risk path that we're already on.
Really nice work! Love to hear these without the big tech job or the crytpo windfalls.
I started around 2012 I think, however my wife is too ill to work and UK salaries....bugger.
Congratulations, a very cool milestone to reach and sounds like you both have created an amazing life!
This is like an in the park home run. Not sure you could have done anything better to increase your result. This is incredible.
Ah! My favorite question!! Catan, Ticket to Ride, 7 Wonders, Dominion, Splendor, Carcassone, Pandemic, Terraforming Mars, etc.
Hell yeah! Don’t change now. If you keep it up your gonna be one of those evil rich people we keep hearing are bad for society! I love it! Having your friend and family included is smart. It helps them and you and your community.
What’s next for you? What goals are you gonna set for yourself for the next decade? Two decades? This money isn’t gonna stop compounding. Any interesting thoughts that might motivate the rest of us?
Haha. We've always said that our goal is to work until 2025. Then we'll buy a bigger home, have a couple kids, and reevaluate our goals. At that point, my wife will probably quit her job to stay at home and I've thought a lot about transitioning to become a high school teacher.
Our original FIRE goal has always been $1.5 million by 2025, which should be pretty doable as long as things stay stable.
In one of my previous posts I talked about my post-FIRE aspirations. I've copied them here for you to take a look at:
* **Post-FIRE Aspirations:** I've always dreamed of being a high school US History teacher and tennis coach. I'd like to at least try it once to see how I like it. Since I'm FIRE I could easily quit If I don't like it. I've also always dreamed of being some kind of not-for-profit financial adviser for the "Average Joe" American. More of a "financial coach" where I could help people everyday with the basics (budgeting, index investing, etc.). Never selling any products. Just sharing my story and trying to inspire people to make positive changes in their lives. My wife is likely to continue her corporate career for a while - even once we're comfortably FIRE. It's hard for me to understand that, but she derives a lot of worth and happiness from her career. But most of all, we want to be great parents. One of the biggest drivers of our FIRE goal is to be very close to FIRE by the time we have kids in our early-mid 30s. We just want to be a part of our child's life every step of the way and just be "there" for them. And of course we have a ton of "bucket list" items that we'd love to try out (thru-hike the Appalachian Trail, thru-hike the John Muir Trail, build a camper-van and road trip to all the National Parks again, etc.).
That’s amazing you got here because you did it before you have kids.
Having kids will change that savings rate and may change you or your wife’s ideas on how to handle money. It happened to us so it’s great you have that pre kids
Yeah! Kids have always been our main motivator for FIRE. We always knew we wanted to work hard and have a very strong financial foundation by the time we hit 30 and were ready for kids. That's been our primary reason for all of this!
ah, shared* net worth. Was thinking single!
Congrats, man. Very well done. Impressive!
You’re killing it! I was going to blame Bitcoin or something on the fact that you’re 300k ahead of my wife and I who are on the same time frame but had slightly higher incomes than you in each year, but then I saw your spending, can’t argue with investing early and often!
Are income numbers pre or post tax?
Either way, awesome post!
All income numbers are our gross pay and are pre-tax.
I’m on track to match your success (if the market plays out) and I find a wife. Lots of variables
Ha! That awesome. In my opinion, WAY more important than the market, is finding a life partner that shares your values and goals. We can't control the market, but we can control who we marry!!
Not rushing to have kids was smart.
YOU FUCKING WON SIR GREAT JOB
The 2020 to today jump is mindboggling. I have money in the market, and it's not enough yet to show that level of growth. Helpful to see. Thanks for sharing and congrats
It's been absolutely RIDICULOUS. And honestly a little scary! It just doesn't seem real at this point.
The fact that our net worth has gone up by over $200k in less than 6 months is insane...
This is the way!
Drake did mention the first million is always the hardest. Well done
This is a great story. Congrats! I love the detail about the fact you don't drink. I gave it up 5 years ago, so me neither. Alcohol was not good for me from a health perspective, but I realized later that holy cow, I was spending a LOT of money on it!
Can you elaborate how you're able to churn enough to fund your annual trips? Also grats on your great progress. It's definitely something to look up to!
Congrats on the $1M mark! I think you hit the nail on the head with the emphasis on having both a partner and friend group that are aligned to FIRE. That's the biggest hurdle I've experienced in my own journey: my wife is pretty lukewarm on FIRE and our friends think it's an interesting idea but are not willing to make adjustments to their lifestyle. Both of those factors make it difficult to hit a really impressive savings rate (70% or higher). We're doing OK at 40-50% SR depending on the year.
Either way, appreciate you sharing your story!
That’s amazing & impressive that you only spent $21k last year between the two of you.
This is motivating, OP. I read through your old post about pursuing FIRE to be there for your kids every step of the way, which really resonates with me as a newly minted dad.
This has motivated me to sift through our expenses this weekend and see where we can trim some fat off. We're nearly where you were in 2019, with similar numbers in savings each year, so maybe FIRE isn't as far away as I thought.
Thanks for the inspiration!
Dude, thanks so much for sharing that. That alone makes putting together this whole post worth it!
This is super inspirational to me. Thanks for sharing! Your lifestyle is similar to mine and my wife’s. Excited to get to your point.
If you have any time to share your career progression, I’d be super interested.
Honestly you are living the dream! I hope everyone on this sub is able to find a likeminded SO and be able to be on the journey together. As a single person, finding someone who understands FIRE and wants to pursue it is incredibly difficult
I don't know if "decent income" is accurate. Your out of college starting salary was not much lower than the national median income, and a current combined ~$200k annually is incredibly high.
That said, kudos to you guys for keeping your spending at (to me) completely reasonable and still plentiful level, despite a very, very high combined salary.
For sure. I guess I say "decent" because it's nowhere near as high as so many of the tech salaries that I always see on this sub! Also, my wife and I actually make less than all of our close friends that we gradated college with. So when I compare myself to them and the people of this sub, our incomes are more "normal" (even though I know they are huge compared to the average American!).
Congratulations and kudos for going on this life-changing journey together. All the best to the two of you :)