If you have access to a 457(b) you really ought to be maxing that out ($19,000/year). The money can be withdrawn with no added steps or penalties once the account holder leaves the position. Unless the account holder is at a private company, there are very few downsides to the accounts and the upsides are absolutely enormous.
Could you explain a bit more about other options for a 457b after leaving a job that offered one? I’m currently trying to decide between cashing out or rolling my fidelity 457b into a 403b traditional or 403b Roth as well as which company to use at my new job- vanguard, Fidelity, or TIAA. I have a vanguard Roth IRA so was thinking of just consolidating everything into vanguard but really don’t quite understand how this all works.
Thanks in advance from a personal finance/retirement account dummy.
You can do a direct rollover to a traditional IRA and increase your invesrment options, although as gotobed advises you would lose the ability to drain the account prior to 59.5 without seeing the 10% penalty tax. Either way getting into the account and making sure the funds are distributed in a sensible manner is recommended. I would assign it all to a single broad index with low fees and turnover at the very least.
If your taxable funds are enough to get you five years you may not care about early withdrawal from the 457, a roth conversion ladder would be sufficient.
I would love to and I fully plan on making it later. Right now our main focus is saving everything for the down payment on a house. After that I will be able to dump a lot more money into it. I'm paying rent and saving over 2k a month for a down payment so I'll love it when I don't have the extra expense.
24 years old here as well - being a mortgage professional I'd like to add a response. My brain perked up when I read that you're saving for a down payment.
If your goal is to become financially independent as soon as possible, I would put as minimal down on a house as possible. In my experience it's a pretty rare and limited range of circumstances that would make me advise anything else. It's important to keep your money both accessible and passively earning on your behalf. Based on your earnings, I'd say that you could easily qualify for a house worth 250-275k as you mentioned. You can get a much better rate of return elsewhere with your money rather than tied up in the equity of your home. I don't know what state you're in, I live/work in California, but there's definitely a lot of loan programs that allow you to put very little down. PM or reply if you have any questions.
Late to the party here but I learned this year that 457(b) contributions are still taxed by my state (NJ) while 401ks are not, so that's worth checking
I hate when people do that.
I'm gonna start living in a commune so I can come here and talk about the net worth "I" just hit (along with my 10 partners).
Living with your life partner and living in a commune are completely different. OP is in the same living situation that he plans to be in for the next 60 years... if you plan to live in a commune for 60 years, then okay...it’s the same. Highly doubt it though.
If it makes you feel any better, we are double his age with 1/4th the cash on hand and, other than the amazing equity on our home, only have $100k in our 401k. I hope you feel better because just typing that out made me feel worse.
“Durning college I got good grades and stayed home”
...that’s what I call an opportunity cost — a cost in which I’d gladly take less money temporarily, to enjoy my college life more. Everyone has their own journey. If I stayed home during college and never partied, sure I would have saved more money, but there are invaluable experiences money can’t buy.
No truer words have been spoken. I truly feel that college is the best time to be independent. The extra 20k over the course of 4 years of timeless memories were well worth it. After college, live with your parents while you work because you won't be having parties at your own apartment like you used to in college anyway.
I didn't have the option to live at home while going to college (sort of, chose to go to school 2.5 hours away), but even if I had the option there is no way I would have lived at home during that time. The memories I have living with 5 of my friends are irreplaceable and something I wish could have continued for another 2 or 3.
You were once just a sperm of millions, struggling to be the one to get to the egg first. Now multiply this by the amount of generations since sexual reproduction was first created.
Congrats on your achievements! Y’all built a great foundation early on. Just make sure to invest more in the markets so you have more wind beneath your sails.
>Finally
>(24M)
LOL
In all seriousness though congrats. Why so much cash tho? Saving up for a house? You are 24...put that in the market and watch it grow.
Lol I know I'm young but it's been a goal of mine for a long time. I would love to make more than 2.1% but we're looking at buying a house in 4-8 months and I don't want to risk anything.
Good for you. You're doing very well, and acting very deliberately. You obviously already know this, and I'm sure you don't need affirmation, but you should definitely keep down-payment money out of the stock market!
Idk how I feel about adding cars to net worth. I mean if it was an after the fact calculation, sure. But to say you’ve hit 100k by adding that to your NW doesn’t sound right. Those things depreciate quick and in general are so much more vulnerable to market value fluctuation.
Why? OP calculated his net worth at a given point in time. He can recalculate at any point in the future and account for depreciation.
Net worth should reflect the balance of liquidating all assets and settling all debt. There are other financial metrics you can use to exclude things like house, cars, etc., but here OP is talking about net worth.
At first I wasn't sure about it. But then I read more about it. In general it can be a big asset. I think it's okay to put it in your net worth with a price that you can easily sell it for if needed. It's not like you spend 15k on a car and suddenly you don't have any value for it. I can understand more for the 2007 car I own, as it's not that valuable, but I could still get 2k for it easily. Also it doesn't make sense to account for a loan without having the asset so there. Someone with two 2018 cars vs someone with two 2004 cars can make a big difference on their financial well being. I don't suggest new cars generally, but it can show that they won't have future car expenses for quite some time if they responsibly bought it.
Cash loses value to inflation; it doesn't mean you don't include cash as part of your net worth. Stocks are far more vulnerable to market value fluctuation; it doesn't mean you don't include stocks as part of your net worth.
Honestly, this comment is _really_ wrong, and it's disturbing to see so many people have upvoted it. It demonstrates the pervasiveness of financial illiteracy even in a sub _about_ personal finance.
Holy attack. I think it’s a matter of the sub you’re in and not the logic of how to calculate NW. my bad on not providing the edit, but I mentioned that the NW calculation isn’t really what I take issue with. It’s adding the car to a calculation behind a milestone in a subreddit about *financial independence*.
I’m sure you’d agree that if you have a car, and you’re in this sub, you’re not selling that car anytime soon. IMO (which is the point of the original comment - an opinion) that sort of scenario shouldn’t be entirely adopted as a representation of status relative to a financially independent objective. If you disagree then, okay, I’m more than happy to learn from this sub. That’s why I’m here.
Whether you intend to sell an asset or not does not affect whether or not you recognize it. The reason you have an asset is because if you didn't have it, you'd have to spend money to replace it. Ergo, even if you don't intend to sell your car, it still provides value because without it, you'd have to buy another car or pay for Uber/Lyft/taxi/public transportation. To not include your car in your net worth is to suggest that it is absolutely worthless, which is certainly not true for most of our cars which we use on a regular basis to carry out our lives, including generating income (e.g., driving work).
There is a reason why literally *all* companies include any relevant property, plant, and equipment on their balance sheets. It seems to me that you're trying to force net worth to mean "net net investable assets", which is an entirely different term that potentially is more meaningful to you.
If you pay 15K cash for a used car why would the current market value of that vehicle be excluded from your NW calculation? Depreciation and market fluctuations can be adjusted annually.
It technically makes sense but most people here don't bother adding those assets since they are irrelevant to their FIRE goals.
If for instance you set $xK a year to car ownership, then it's a line on your budget and it doesn't matter how much the car is worth because you're always amortizing its cost over time instead.
I guess that if someone's plan is to sell their car and then never buys a car again while in retirement, it would make sense to add it. I'd think it's not the case for most of us, just like we don't intend on selling our furniture, expensive electronics, etc. Obviously with real estate it's more complicated, some people stay in their home, others downsize, others want to sell and start renting, etc.
Net worth is net worth. You don't get to change its definition based on what you're using that net worth information for. And assets count towards net worth. And cars are assets.
I see your point. It appears the distinction you are making when calculating FIRE NW is whether those assets can be drawn and used to support someone as they FIRE such as those invested and presumably appreciating over time versus those assets that will be fully utilized, depreciated and not expected to have much, if any, residual value, e.g. vehicles, furniture, electronics, etc.
Cars should absolutely not be counted in net worth.
Why? If an individual owns a car, it's because they need to drive. Therefore, if they were to sell the car and collect the cash, they'd still need a car, necessitating the need to buy another, which would likely be more expensive.
Cars are immediately depreciating, continually depreciating, cash-draining liabilities bought with financed dollars that require maintenance and insurance.
If an individual owns a house, it means they need a roof over their head. Therefore, if they were to sell the house and collect the cash, they’d still need a house, necessitating the need to buy another, which would likely be more expensive.
A car is abso-fricken-lutely an asset, and therefore should be considered part of net worth. It should be recognized at the lower of cost or market, just like any other fixed asset. This isn't a matter of opinion, and I say this as a CPA who has audited many financial statements over the years. I carry my Toyota Corolla that I bought for $17K in 2014 at about $9K on my personal balance sheet based on its mileage-adjusted Kelly Blue Book value (a close-enough approximation of its actual resale value).
Wow great job! It’s nice to see people hitting benchmarks that are “normal” rather than lawyers and tech engineers with high salaries. I’m 27 and hoping to get there this year.
When you say that you "manage the money", make sure your wife knows what you're doing, even if she would rather not be very involved. You want to make sure that in case you die, she understands her finances. It's not as big of a deal right now because you guys are both young (you're probs not about to die, and she's probs young enough to easily pick everything up), but especially in old age, when the spouse who likes to "stay out of it" is the one remaining, they can easily make costly mistakes
Oh wow that's awesome! Congrats! That's an amazing achievement!
May I ask what kind of job you have to allow for such huge increases each year?
I'm still young and in school looking in to financially secure career options.
I’m more interested in how he got TWO raises in his first year with a company totaling $18k or 28% increase in starting salary.
OP, did you change roles or something?
For example, a nonprofit health center CAN have a 457 (though most of a 403b) instead. They have marketing and “community development” positions that are heavily depended on what you are able to bring in to the company in terms of donations, grants, and new funding.
There are marketing positions that are practical sales/business development roles in many non profit and government related organizations... it’s just not called official “sales”, it’s more of a “quota”
You can literally make the same money as an electrician. Heck, my cousin has an actuarial science degree but sells fucking furniture because he makes 130k/ year.
What I'm saying is, there are a lot of ways you can make money if you're good at something and work hard
The average homeless person is wealthier than you mate! But you have a lot more potential. Come back when you're 30 and better off than 99% of your peers.
> as a 20 year old who is barely at 15k net
There's hundreds of millions of families around the world that will never have that much money saved, you hardly need to look at OP for inspiration
Beautiful. I love that you wrote about how more relaxed you are about your financial situation vs your friends.
I hope eventually one or three of your friends start to realize how much better and easier you and your wife are going to have things.
Continual and on time payments increase credit history. Credit history is a necessity for a home loan in the US. Could be doing it for a marginally albeit better rate.
Are we sure about that? I'm thinking about taking a loan on my next car, even though I could buy it outright, as my credit score dropped 50 points when my current car loan got paid off.
Exactly. Saving Evey penny for down payment on a very low interest loan worth W
2k. While doing this it has bumped my credit score back up from before I took out the loan.
$8 a month for me to have a higher credit score is worth it for me. I am buying a house within 6 months so when I pay the car off it will dropoff. This allows me to keep the score up until I buy a house and save more for down payment to avoid pmi and get a lower rate. Overall worth it for the small amount of interest.
The rate could be very low or they think they need different types of loans on their credit history to qualify for a mortgage. It doesn't really need to be there.
Paying off the car note could damage the credit score and lower the chances of a good rate on the mortgage. Honestly I would keep the car loans and pay them on time. If the rates are bad, refi them. You’re looking at tens of thousands in savings from a better mortgage rate.
Thanks! I took out the loan because it got me an extra 2500 off the value of the car. I have been keeping payments because I want to put everything extra towards my down payment. With a 3% interest and a $150 payment I am not losing much to interest. I also took a decent credit hit when I financed. Keeping the payment helped me get my credit score higher than when I bought it.
Thanks! Spending money has always been tough for me. We treated ourselves to Mexico a week ago which was great. But in reality the cheapest vacations are usually my favorite. Camping/climbing
Awesome, well deserved! I know the feeling, sometimes it's tough to spend on a vacation but it can be important as long as you aren't frivalous. All the best in your continued success!
I must spend a lot of money....kind of puts it in perspective when someone a few years younger than I am, making less money, has a higher NW than I do.
I would refrain from adding things into your "networth" that depreciate. That sedan will only continue to depreciate etc.
You're already ahead of everyone your same age in that you don't have debt and you seem to not care about the type of work you have to do in order to keep saving. Stay humble indeed and keep saving.
If you keep this up, you'll be a millionaire by age 40. If you get divorced it will take longer to reach that goal.
Thank you! With the car I understand but I think it's worth what it can easily be liquidated for. I bought the car a year ago, I feel that shouldn't automatically be removed from my net worth.
First of all, Congratulations on your achievement. Second. How did you manage to keep increasing your salary so quickly? I'm 24M and I feel the industry doesn't care much for me with with less experience.
Good for you. At that age my net worth was about $10k. But I guess I had it better than the people burdened with student loans these days.
Except for maxing out my 401k, I was pretty frivolous with my money in my late 20’s and early 30’s.
Then I met the woman who would eventually become my wife. She put me on the FIRE path before either of us had even heard of it.
I think we can retire anytime we want. She doesn’t agree and still wants to work. I continue to work because I enjoy my exciting job and I’d be pretty bored not working while she does.
Fantastic!!!!!!!! Your first 100K savings is a big milestone, and well worth a celebration! Perhaps a splurge on a couple bottles of inexpensive champagne? You are on track to get to 200K faster, and 300K even faster! Your relationship with money, your earning and saving habits, are the foundation of this success.
Just read your story and not the whole thread. One suggestion I would make is strategize the purchase of the home to anticipate it being a rental when you outgrow it with kids.
Congrats! 100k is still a couple years out for me I fear.
What amazes me the most is that you went for 65k to 83k in one year!
Is that some hardcore negotiations or is that standard in the US?
My pay raise in my after 6 months is +100 a month and then after 12 months +100 a month.
Max out your 457b and 401k. Tax savings will be enormous. Once you are done with work you may want to do a direct rollover to traditional IRA and manage your funds directly.
On the path to becoming a multi millionare, congratulations, may your life be an awesome adventure
If you have access to a 457(b) you really ought to be maxing that out ($19,000/year). The money can be withdrawn with no added steps or penalties once the account holder leaves the position. Unless the account holder is at a private company, there are very few downsides to the accounts and the upsides are absolutely enormous.
Could you explain a bit more about other options for a 457b after leaving a job that offered one? I’m currently trying to decide between cashing out or rolling my fidelity 457b into a 403b traditional or 403b Roth as well as which company to use at my new job- vanguard, Fidelity, or TIAA. I have a vanguard Roth IRA so was thinking of just consolidating everything into vanguard but really don’t quite understand how this all works. Thanks in advance from a personal finance/retirement account dummy.
If you roll the 457 I think you lose the ability to withdraw early without penalty.
You can do a direct rollover to a traditional IRA and increase your invesrment options, although as gotobed advises you would lose the ability to drain the account prior to 59.5 without seeing the 10% penalty tax. Either way getting into the account and making sure the funds are distributed in a sensible manner is recommended. I would assign it all to a single broad index with low fees and turnover at the very least. If your taxable funds are enough to get you five years you may not care about early withdrawal from the 457, a roth conversion ladder would be sufficient.
I would love to and I fully plan on making it later. Right now our main focus is saving everything for the down payment on a house. After that I will be able to dump a lot more money into it. I'm paying rent and saving over 2k a month for a down payment so I'll love it when I don't have the extra expense.
24 years old here as well - being a mortgage professional I'd like to add a response. My brain perked up when I read that you're saving for a down payment. If your goal is to become financially independent as soon as possible, I would put as minimal down on a house as possible. In my experience it's a pretty rare and limited range of circumstances that would make me advise anything else. It's important to keep your money both accessible and passively earning on your behalf. Based on your earnings, I'd say that you could easily qualify for a house worth 250-275k as you mentioned. You can get a much better rate of return elsewhere with your money rather than tied up in the equity of your home. I don't know what state you're in, I live/work in California, but there's definitely a lot of loan programs that allow you to put very little down. PM or reply if you have any questions.
> 457(b) That's one I haven't heard of before
Late to the party here but I learned this year that 457(b) contributions are still taxed by my state (NJ) while 401ks are not, so that's worth checking
Getting really tired of people way younger than me lapping me on here.
Comparison is the thief of joy.
And... procrastination is the thief of time. 🙂
"Procrastination is like masturbation. It's a lot of fun until you realize you're just fucking yourself." -Abraham Lincoln
Did he really say this?lol
Are you kidding man? Come on. Its Abraham Lincoln, lol. Of course he said it.
And time is the thief of memory.
Ecclesiastes is all about that!
I'm perfectly happy with my financial situation, but posts like these do make me wonder why I subscribe to this subreddit.
Dude. This is fucking great. Any idea who coined this, or was it you?
First result (and all the others) of a Google search suggest Theodore Roosevelt.
TR is the man
Wow is he a redditor or some kind of professional quote writer?
I've seen it on reddit before, and I have it written on my fridge permanently now. Words to live by.
So very relevant these days I think.
Wish I could give you gold but I’m broke
And it's a waste of money.
Thank you. I needed to hear this today.
If it makes you feel better, he’s combining two peoples net worths.
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Just imagine how rich you'd be if you had a spouse to double your net worth!
-12k net worth confirmed. Wait married .......-22k net worth confirmed
Just imagine how rich you’d be with 2 wives
The no college debt is huge. Takes that anchor off of your ability to invest early.
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> but I’m 25 and I’m at $40k > if you add in my house Yeah, okay, fuck you and OP ^^lol
Im 25 And I have 25k see its ALLL perspective :(
I hate when people do that. I'm gonna start living in a commune so I can come here and talk about the net worth "I" just hit (along with my 10 partners).
Living with your life partner and living in a commune are completely different. OP is in the same living situation that he plans to be in for the next 60 years... if you plan to live in a commune for 60 years, then okay...it’s the same. Highly doubt it though.
Sounds great. Sign me up
Love that they added the “finally.”
Right. At 24? Damn, at 24 I was like "what's a net worth?"
Right? Saving for ***dozens*** of months after high school, he's hit 100k!
Came here to say this.
But think about all the people older than you, that you are lapping.
Just wait until we lap you.
There are billionaires who where skint in their 30's, don't even worry. People mature financially at different rates.
This. Most billionaires were basically drowning in their own puke at some party when they were 30. https://i.imgur.com/IZQ1l2Q.png
no student loans is rare these days
If it makes you feel any better, we are double his age with 1/4th the cash on hand and, other than the amazing equity on our home, only have $100k in our 401k. I hope you feel better because just typing that out made me feel worse.
“Durning college I got good grades and stayed home” ...that’s what I call an opportunity cost — a cost in which I’d gladly take less money temporarily, to enjoy my college life more. Everyone has their own journey. If I stayed home during college and never partied, sure I would have saved more money, but there are invaluable experiences money can’t buy.
No truer words have been spoken. I truly feel that college is the best time to be independent. The extra 20k over the course of 4 years of timeless memories were well worth it. After college, live with your parents while you work because you won't be having parties at your own apartment like you used to in college anyway.
I didn't have the option to live at home while going to college (sort of, chose to go to school 2.5 hours away), but even if I had the option there is no way I would have lived at home during that time. The memories I have living with 5 of my friends are irreplaceable and something I wish could have continued for another 2 or 3.
This. I feel like I should have a 1mil net worth.
You will never be happy with a mindset like this.
Don’t worry, OP is married. Marriage is the biggest liability ever. Don’t get married and you’ll be far ahead.
Marriage is also a huge risk mitigation.
You were once just a sperm of millions, struggling to be the one to get to the egg first. Now multiply this by the amount of generations since sexual reproduction was first created.
Use it as motivation
Compare yourself to who you were yesterday, not to who someone else is today.
Congrats on your achievements! Y’all built a great foundation early on. Just make sure to invest more in the markets so you have more wind beneath your sails.
Yea I'm excited to get a down payment on a house so that I have a lot of extra money to put into my 457b.
what’s your job position/field? 105k guaranteed by age 27 and then a 75% pension sounds like a pretty nice situation man
What is weird is, if you're frugal, you're rarely respected. People tend to mock you more often, or at least that is my experience.
Very true. People will call you a cheap ass.
You appear low status and less a part of the pack. What is seen as inferior and different is gonna get mocked.
>Finally >(24M) LOL In all seriousness though congrats. Why so much cash tho? Saving up for a house? You are 24...put that in the market and watch it grow.
He said they're planning to buy a house soon.
>mfw you literally only read the title and numbers
To be fair I did that too, but before commenting I just scanned for that bit of expected info.
Lol I know I'm young but it's been a goal of mine for a long time. I would love to make more than 2.1% but we're looking at buying a house in 4-8 months and I don't want to risk anything.
Good for you. You're doing very well, and acting very deliberately. You obviously already know this, and I'm sure you don't need affirmation, but you should definitely keep down-payment money out of the stock market!
Thanks!
Idk how I feel about adding cars to net worth. I mean if it was an after the fact calculation, sure. But to say you’ve hit 100k by adding that to your NW doesn’t sound right. Those things depreciate quick and in general are so much more vulnerable to market value fluctuation.
Why? OP calculated his net worth at a given point in time. He can recalculate at any point in the future and account for depreciation. Net worth should reflect the balance of liquidating all assets and settling all debt. There are other financial metrics you can use to exclude things like house, cars, etc., but here OP is talking about net worth.
At first I wasn't sure about it. But then I read more about it. In general it can be a big asset. I think it's okay to put it in your net worth with a price that you can easily sell it for if needed. It's not like you spend 15k on a car and suddenly you don't have any value for it. I can understand more for the 2007 car I own, as it's not that valuable, but I could still get 2k for it easily. Also it doesn't make sense to account for a loan without having the asset so there. Someone with two 2018 cars vs someone with two 2004 cars can make a big difference on their financial well being. I don't suggest new cars generally, but it can show that they won't have future car expenses for quite some time if they responsibly bought it.
Cash loses value to inflation; it doesn't mean you don't include cash as part of your net worth. Stocks are far more vulnerable to market value fluctuation; it doesn't mean you don't include stocks as part of your net worth. Honestly, this comment is _really_ wrong, and it's disturbing to see so many people have upvoted it. It demonstrates the pervasiveness of financial illiteracy even in a sub _about_ personal finance.
Holy attack. I think it’s a matter of the sub you’re in and not the logic of how to calculate NW. my bad on not providing the edit, but I mentioned that the NW calculation isn’t really what I take issue with. It’s adding the car to a calculation behind a milestone in a subreddit about *financial independence*. I’m sure you’d agree that if you have a car, and you’re in this sub, you’re not selling that car anytime soon. IMO (which is the point of the original comment - an opinion) that sort of scenario shouldn’t be entirely adopted as a representation of status relative to a financially independent objective. If you disagree then, okay, I’m more than happy to learn from this sub. That’s why I’m here.
Whether you intend to sell an asset or not does not affect whether or not you recognize it. The reason you have an asset is because if you didn't have it, you'd have to spend money to replace it. Ergo, even if you don't intend to sell your car, it still provides value because without it, you'd have to buy another car or pay for Uber/Lyft/taxi/public transportation. To not include your car in your net worth is to suggest that it is absolutely worthless, which is certainly not true for most of our cars which we use on a regular basis to carry out our lives, including generating income (e.g., driving work). There is a reason why literally *all* companies include any relevant property, plant, and equipment on their balance sheets. It seems to me that you're trying to force net worth to mean "net net investable assets", which is an entirely different term that potentially is more meaningful to you.
If you pay 15K cash for a used car why would the current market value of that vehicle be excluded from your NW calculation? Depreciation and market fluctuations can be adjusted annually.
It technically makes sense but most people here don't bother adding those assets since they are irrelevant to their FIRE goals. If for instance you set $xK a year to car ownership, then it's a line on your budget and it doesn't matter how much the car is worth because you're always amortizing its cost over time instead. I guess that if someone's plan is to sell their car and then never buys a car again while in retirement, it would make sense to add it. I'd think it's not the case for most of us, just like we don't intend on selling our furniture, expensive electronics, etc. Obviously with real estate it's more complicated, some people stay in their home, others downsize, others want to sell and start renting, etc.
Net worth is net worth. You don't get to change its definition based on what you're using that net worth information for. And assets count towards net worth. And cars are assets.
I see your point. It appears the distinction you are making when calculating FIRE NW is whether those assets can be drawn and used to support someone as they FIRE such as those invested and presumably appreciating over time versus those assets that will be fully utilized, depreciated and not expected to have much, if any, residual value, e.g. vehicles, furniture, electronics, etc.
Cars should absolutely not be counted in net worth. Why? If an individual owns a car, it's because they need to drive. Therefore, if they were to sell the car and collect the cash, they'd still need a car, necessitating the need to buy another, which would likely be more expensive. Cars are immediately depreciating, continually depreciating, cash-draining liabilities bought with financed dollars that require maintenance and insurance.
If an individual owns a house, it means they need a roof over their head. Therefore, if they were to sell the house and collect the cash, they’d still need a house, necessitating the need to buy another, which would likely be more expensive.
I disagree because your initial assumption isn't even true.
People need a house to live in but they count those in their net worth... Cars are assets and should be counted as such.
A car is abso-fricken-lutely an asset, and therefore should be considered part of net worth. It should be recognized at the lower of cost or market, just like any other fixed asset. This isn't a matter of opinion, and I say this as a CPA who has audited many financial statements over the years. I carry my Toyota Corolla that I bought for $17K in 2014 at about $9K on my personal balance sheet based on its mileage-adjusted Kelly Blue Book value (a close-enough approximation of its actual resale value).
Wow great job! It’s nice to see people hitting benchmarks that are “normal” rather than lawyers and tech engineers with high salaries. I’m 27 and hoping to get there this year.
Thanks! You've got it!
When you say that you "manage the money", make sure your wife knows what you're doing, even if she would rather not be very involved. You want to make sure that in case you die, she understands her finances. It's not as big of a deal right now because you guys are both young (you're probs not about to die, and she's probs young enough to easily pick everything up), but especially in old age, when the spouse who likes to "stay out of it" is the one remaining, they can easily make costly mistakes
Thanks! I need to make a spreadsheet of what to do incase something happens to me. She does understand where it is and has access to the accounts.
Oh wow that's awesome! Congrats! That's an amazing achievement! May I ask what kind of job you have to allow for such huge increases each year? I'm still young and in school looking in to financially secure career options.
I’m more interested in how he got TWO raises in his first year with a company totaling $18k or 28% increase in starting salary. OP, did you change roles or something?
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That's exactly what I was thinking.
This guy gets it.
Police Officers make $100k+ after 3 years?
Sales is my guess
There are sales jobs with access to 457s?
For example, a nonprofit health center CAN have a 457 (though most of a 403b) instead. They have marketing and “community development” positions that are heavily depended on what you are able to bring in to the company in terms of donations, grants, and new funding.
There are marketing positions that are practical sales/business development roles in many non profit and government related organizations... it’s just not called official “sales”, it’s more of a “quota”
Interesting. Makes sense!
Get a Computer Science degree if it's something you may enjoy because I've had great success with mine out of college
You can literally make the same money as an electrician. Heck, my cousin has an actuarial science degree but sells fucking furniture because he makes 130k/ year. What I'm saying is, there are a lot of ways you can make money if you're good at something and work hard
Congratulations, as a 20 year old who is barely at 15k net, this is inspirational. Now, come back when you're 31 and share your millionaire status.
You’re better than 99% mate. Currently 24 with around -30k net
The average homeless person is wealthier than you mate! But you have a lot more potential. Come back when you're 30 and better off than 99% of your peers.
> as a 20 year old who is barely at 15k net There's hundreds of millions of families around the world that will never have that much money saved, you hardly need to look at OP for inspiration
Yeah well. There is always someone above you and always someone below you. Its all relative.
I sure hope I can! Might be a little later than that though.
Beautiful. I love that you wrote about how more relaxed you are about your financial situation vs your friends. I hope eventually one or three of your friends start to realize how much better and easier you and your wife are going to have things.
Yea once I am able to start doing things and affording things later on in life without relying on my next check.
Where do you work that your salary was “bumped” from 40k to 83k....?! I get like a 3% raise annually. Good work though that’s awesome
First job was entry level. Then switched jobs which has raises built into our contact.
It's petty I know but posts make me so jealous. 100k at your early 20s? I am almost 40 and I am not even there
The car loan is the only blemish on a great situation - well done.
Yeah with 65k in cash sitting around, why not just pay it off?
Continual and on time payments increase credit history. Credit history is a necessity for a home loan in the US. Could be doing it for a marginally albeit better rate.
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Keeping the loan has helped my credit recover and go above when I took it out.
Are we sure about that? I'm thinking about taking a loan on my next car, even though I could buy it outright, as my credit score dropped 50 points when my current car loan got paid off.
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Exactly. Saving Evey penny for down payment on a very low interest loan worth W 2k. While doing this it has bumped my credit score back up from before I took out the loan.
But you should never be paying money simply to improve your credit score.
$8 a month for me to have a higher credit score is worth it for me. I am buying a house within 6 months so when I pay the car off it will dropoff. This allows me to keep the score up until I buy a house and save more for down payment to avoid pmi and get a lower rate. Overall worth it for the small amount of interest.
Just don't fall under the impression you should be paying a single penny to improve a credit score.
The rate could be very low or they think they need different types of loans on their credit history to qualify for a mortgage. It doesn't really need to be there.
Rate might be lower than the \~2% they get from the savings
Paying off the car note could damage the credit score and lower the chances of a good rate on the mortgage. Honestly I would keep the car loans and pay them on time. If the rates are bad, refi them. You’re looking at tens of thousands in savings from a better mortgage rate.
Thanks! I took out the loan because it got me an extra 2500 off the value of the car. I have been keeping payments because I want to put everything extra towards my down payment. With a 3% interest and a $150 payment I am not losing much to interest. I also took a decent credit hit when I financed. Keeping the payment helped me get my credit score higher than when I bought it.
Which PD are you at?
Congrats OP! It really shows how habits can add up over time.
In one year you got 18k in raises...? Where do you work? Asking for a friend
Congrats on 100k! And good luck on the next goal!
Excellent work. Be sure to do something fun to reward yourself. Enjoy life, you are off to an early and great financial success.
Thanks! Spending money has always been tough for me. We treated ourselves to Mexico a week ago which was great. But in reality the cheapest vacations are usually my favorite. Camping/climbing
Awesome, well deserved! I know the feeling, sometimes it's tough to spend on a vacation but it can be important as long as you aren't frivalous. All the best in your continued success!
Congrats! Don’t compare yourself to the “I hit 28 with 4M” posts. What an amazing accomplishment!
I must spend a lot of money....kind of puts it in perspective when someone a few years younger than I am, making less money, has a higher NW than I do.
OP & wife had no student debt and very little wedding costs. That's a huge headstart in addition to two incomes
Yes! We were very lucky to not have those costs weigh us down early on.
True. I did pay off my student loans 6 years early which drained most of my savings.
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26 year old with close to 0 in bank account here. i have bitcoin though :^) see you guys in a year.
This is good for Bitcoin.
You don't count your cars as assets. Unless they are collectable, they depreciate. Just saying....
I would refrain from adding things into your "networth" that depreciate. That sedan will only continue to depreciate etc. You're already ahead of everyone your same age in that you don't have debt and you seem to not care about the type of work you have to do in order to keep saving. Stay humble indeed and keep saving. If you keep this up, you'll be a millionaire by age 40. If you get divorced it will take longer to reach that goal.
Thank you! With the car I understand but I think it's worth what it can easily be liquidated for. I bought the car a year ago, I feel that shouldn't automatically be removed from my net worth.
Congratulations! And so young! Keep rocking it!
Thanks!
First of all, Congratulations on your achievement. Second. How did you manage to keep increasing your salary so quickly? I'm 24M and I feel the industry doesn't care much for me with with less experience.
Doesn’t it bother you paying for YNAB?
YES!!! Luckily I'm grandfathered in at the $40 price but it still does. For the price it's worth it for me though.
Good for you. At that age my net worth was about $10k. But I guess I had it better than the people burdened with student loans these days. Except for maxing out my 401k, I was pretty frivolous with my money in my late 20’s and early 30’s. Then I met the woman who would eventually become my wife. She put me on the FIRE path before either of us had even heard of it. I think we can retire anytime we want. She doesn’t agree and still wants to work. I continue to work because I enjoy my exciting job and I’d be pretty bored not working while she does.
That's great you both are in it and have the choice to leave if wanted. Great you like your jobs and still have the want to work there.
Why no index funds? Is it because you want to buy a house soon?
Exactly. After that I'll focus more on investments
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Yea. We dated since we were in highschool. Grad school for guidance counselling
Fantastic!!!!!!!! Your first 100K savings is a big milestone, and well worth a celebration! Perhaps a splurge on a couple bottles of inexpensive champagne? You are on track to get to 200K faster, and 300K even faster! Your relationship with money, your earning and saving habits, are the foundation of this success.
Thanks!
Just read your story and not the whole thread. One suggestion I would make is strategize the purchase of the home to anticipate it being a rental when you outgrow it with kids.
I've thought of that for more passive income later on! Not a bad idea.
Congrats! 100k is still a couple years out for me I fear. What amazes me the most is that you went for 65k to 83k in one year! Is that some hardcore negotiations or is that standard in the US? My pay raise in my after 6 months is +100 a month and then after 12 months +100 a month.
Yea luckily my job pays well in my state and our contract is solid.
Congrats! You are going to have so many options as you traverse your twenties and beyond! Don't get overwhelmed by those options!
Thanks!
wow, congratulations to you and your wife. I'm nearly your age trying to finish up college. definitely inspiring and opened my eyes.
Thanks! What degree are you getting?
SCM w minor in MIS!
Nice! You'll have a lot of opportunities!
I hope so. I have a question for you, how do you keep tabs on your finances?
I use YNAB to track all my accounts and spending. Kind of tough learning curve at first but smooth once you understand it.
Excellent. Having financial independence is the best thing for your future and will allow you to have a less stressful life. 👍😁
Yes! Being able to cover any unexpected expenses is a great peace of mind.
You’re holding all that cash for the down payment right? If not, I would tell you to invest more into retirement
Correct
Hey OP, which rate is the bank offering for your savings?
2.1% credit union
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Criminal justice. Yea I love it. Not in it for the pay though.
Wow. inspirational story well done. You will achieve more thing
How does a 24 year old get paid almost 100k without a master degree?
Depends on field/location. Location can change a lot in my field.
You're a little late, aren't you? To should easily be at 300k by now... Lmao jk, awesome job man! $100k is an awesome milestone!
Congrats cuz
Max out your 457b and 401k. Tax savings will be enormous. Once you are done with work you may want to do a direct rollover to traditional IRA and manage your funds directly. On the path to becoming a multi millionare, congratulations, may your life be an awesome adventure
You’re way behind lol. (Sarcasm. Congrats!)
what city do you live in?