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Old 07-05-2015, 11:53 AM   #81
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I'm glad to see a thread about this on here. I spend a lot of time thinking about my career path and finances. Worryingly, my investments, on which my bank advised me, are returning less than 2%, which is pathetic. I need to find a better, secure solution that still won't need me thinking about it too much.

I'm in my early 30s and work as a flight attendant, which means lots of time off (but jet-lag), above-average pay, defined benefit pension (if the company doesn't succeed in screwing us out of it), and cheap travel.

I manage to put away about 18% of my take home pay, and feel pretty good about that, except that home ownership has gotten so expensive. The condo market in Montreal is currently a waste of money in my opinion, and the only way to get a house for under a quarter million is to live 2 hours outside of town, which currently wouldn't make any sense.

...don't feel like I'm balling at all, despite no debt and a modest, growing, 5 figure savings account.

It's interesting to see what you cats do.
250k for a condo is about going rate anywhere near civilization for something decent, my condo is 2bed/2bath 910sq/ft 45min out of the city (Edmonton) and cost me 252k (brand new in '08 mind you).

As for the savings account, is that just stagnant money sitting there doing nothing? Any decent mutual fund will get you a 10% return a year on that money so I'd definitely look into investing some of that. I keep the bare minimum for mortgage/bill payments in my saving/checking accounts, no reason to have 50k sitting there doing **** all.

Idk why everyone is looking to "retire" in their 40's here, do you guys all have jobs you hate?? Or is there better money making opportunities out there and if that's the case why not jump into those careers now?

I'm definitely not retiring before my defined benefit pension matures, penalties for pulling early are insane..
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Old 07-05-2015, 12:10 PM   #82
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IMHO, life isn't about money.Money can always be made and it is not something that you can take with you when you die. If you have the option to live comfortably and retire early than that is more free time to spend with family, find personal enrichment ( read: building turbo miatas), and to do things that you normally couldn't spend much time doing due to working full time. The added benefit of being able to chase other ventures is great as well, sometimes a full time gig will not allow you to delve into other realms of business without sacrifices being made at your current employer.

Plus, having everything paid off isn't a bad thing. I agree with you though, if you love your job and do not see it as work, then by all means continue to do it for as long as you can. As a military member, I'm burned out every week. The sooner I'm able to be financially independent and retire early with a lump sum then the more time I'll get to spend with my kids, my wife, and with my family/friends. Just my two cents.
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Old 07-05-2015, 12:48 PM   #83
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I enjoy what I do. I may not retire early but may continue to be able to afford to travel more and better, which is what I enjoy doing for vacation.
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Old 07-07-2015, 05:05 PM   #84
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Good read so far, learning a lot.

I feel as if I'm a prime example of one becoming debt free.

I'd give out props but kitty faces will do...
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Old 07-09-2015, 02:44 PM   #85
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Got my 401k stuff figured out thanks to sixshooter. 5% Roth 5% Pre-tax. Invested in a fund with really low expense costs. And using a 401k calculator puts it at $4189222 when I'm 67. Not shabby. This also depends on whether or not I work in the same place for 45 years.
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Old 07-09-2015, 03:02 PM   #86
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Got my 401k stuff figured out thanks to sixshooter. 5% Roth 5% Pre-tax. Invested in a fund with really low expense costs. And using a 401k calculator puts it at $4189222 when I'm 67. Not shabby. This also depends on whether or not I work in the same place for 45 years.
Based on average inflation projected however many years you used to get you to 67 years of age, when you retire with that amount of money, how much will a loaf of bread cost when you retire?

What I'm asking is, is that enough to retire then based on your retirement goals? Perhaps 4.1M today is, but what about in the future when the buying power of that amount is lower? Just something to look at in case you have not already looked into this.
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Old 07-09-2015, 03:04 PM   #87
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If that's the case I have bigger issues. The 401k is a safe place I can put some money for retirement. Its not like I'm sticking 90% of my income there.
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Old 07-09-2015, 03:10 PM   #88
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If that's the case I have bigger issues. The 401k is a safe place I can put some money for retirement. Its not like I'm sticking 90% of my income there.
What do you mean? If what's the case?
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Old 07-09-2015, 03:10 PM   #89
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Based on average inflation projected however many years you used to get you to 67 years of age, when you retire with that amount of money, how much will a loaf of bread cost when you retire?

What I'm asking is, is that enough to retire then based on your retirement goals? Perhaps 4.1M today is, but what about in the future when the buying power of that amount is lower? Just something to look at in case you have not already looked into this.
It would be worth $1.107M (in today's dollars) in 45 years at 3% inflation which is the average inflation rate over the past 60 years. He could withdraw about $45,000 (In today's dollars) from this account for an nearly indefinite amount of time without eating into principle even consider market ups and downs. If he was willing to slowly deplete the principal he could live off of more adjusted for inflation.

So by saving only 10% of his income he is able to retire by 67 fairly comfortably. I am not sure if his calculation even included raises of any kind over the life of his career.
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Old 07-09-2015, 03:11 PM   #90
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I mean if a loaf of bread costs so much that a 50k a year salary isn't enough to survive I have bigger issues. We would have bigger issues.
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Old 07-09-2015, 03:18 PM   #91
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I mean if a loaf of bread costs so much that a 50k a year salary isn't enough to survive I have bigger issues. We would have bigger issues.
It's surely enough to survive. I asked you if you will reach your retirement GOALS doing this. If your goal is to survive then you're good. Ryan did the math with 45 years and the future value is 1.1M, which is 1.1/4.1 = ~27% of what that's worth today. That's a HUGE difference, thus why I mentioned this as it's an extremely important part of planning your retirement!
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Old 07-09-2015, 03:25 PM   #92
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This is not my only source of retirement money. Its just 10%. Something to get stared earlier.
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Old 07-09-2015, 03:31 PM   #93
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This is not my only source of retirement money. Its just 10%. Something to get stared earlier.
You got good advice on splitting the contribution between ROTH and Traditional 401K. Nice way to minimize the future tax risks (I.E. unknown given our congress).
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Old 07-09-2015, 07:16 PM   #94
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You got good advice on splitting the contribution between ROTH and Traditional 401K. Nice way to minimize the future tax risks (I.E. unknown given our congress).
He's a good guy and deserves good advice. He's frugal and will likely have his home paid for well before retirement and a bunch more money socked away. He will be fine.

Pat, please don't give people **** for *only* planning on having 4+million dollars at retirement when they are 22 years old. It comes across really snide. He should be applauded and encouraged.
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Old 07-09-2015, 07:20 PM   #95
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Haha thanks six. I'm banking on frugality, and if my gf ends up being a surgeon and we stick together then I will have a little more room for play. Its definitely a learning process and this thread had helped a lot. It literally could not have been started at a better time.
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Old 07-09-2015, 07:31 PM   #96
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It's surely enough to survive. I asked you if you will reach your retirement GOALS doing this. If your goal is to survive then you're good. Ryan did the math with 45 years and the future value is 1.1M, which is 1.1/4.1 = ~27% of what that's worth today. That's a HUGE difference, thus why I mentioned this as it's an extremely important part of planning your retirement!
Since you consider $45,000 inflation adjusted dollars per year as just surviving. Would you mind sharing more details on your particular goals? I am just genuinely curious.
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Old 07-09-2015, 07:43 PM   #97
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He's a good guy and deserves good advice. He's frugal and will likely have his home paid for well before retirement and a bunch more money socked away. He will be fine.

Pat, please don't give people **** for *only* planning on having 4+million dollars at retirement when they are 22 years old. It comes across really snide. He should be applauded and encouraged.
Damn, well that's 100% NOT what I was going for. Sorry if I've offended anyone! I hope you can realize that's not the intent. There's a ton of good advice here, I was just trying to add to it by saying you do have to look at the future value of your money when planning these things. It's important. If he's only 22 and planning for retirement in 45 years the value of the dollar is going to change a lot by then. Agreed it's good to plan this out now, the sooner the better!
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Old 07-09-2015, 07:45 PM   #98
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Originally Posted by sixshooter View Post
He's a good guy and deserves good advice. He's frugal and will likely have his home paid for well before retirement and a bunch more money socked away. He will be fine.

Pat, please don't give people **** for *only* planning on having 4+million dollars at retirement when they are 22 years old. It comes across really snide. He should be applauded and encouraged.
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Since you consider $45,000 inflation adjusted dollars per year as just surviving. Would you mind sharing more details on your particular goals? I am just genuinely curious.
I said if his goal is to survive he'll be fine with that amount. I'll shoot you a PM.
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Old 07-10-2015, 12:44 AM   #99
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I'll throw in my experience. I saved a lot right out of college, then used it to purchase a house and start the rat race. We have all the 'normal' luxuries like HD TV, big brand cell phone plans and the latest phones, and shop at high end stores for high end goods (middle-class good, not celebrity good). It's perfectly fine IMHO to spend money if you're smart about what you purchase and how you use your credit. We've always been able to find deals for 12-24 month interest free payments on things for the house or ourselves that we will pass on to our kids. Our mortgage and student loans are the only credit we maintain that accrues interest, and that interest is tax deductible. I keep two credit cards, and when I have a month of emergency spending that exceeds what I want to pay out of my checking, I will transfer to a secondary card that is interest free balance transfers for 12-18 months.

I used to be an extreme cheap *** that shopped at Walmart for shoes and dress pants. A few years back, I discovered that if I buy a high quality pair of shoes, some polish and nice wool dress pants, they will last me 3-5 years instead of 1 year. Another example was my $400 discount store leather couch. It broke within the first year. Ironically, my wife's $800 microfiber couch is still sitting comfortably in our living room after about 5 years now.

I know it's nice for some people to live off the grid, with no electronics, and shitting into a bucket every night; but I prefer a balanced lifestyle where I save just enough that I won't feel guilty if I go out for a steak every now and then.

My philosophy is this: if I can make more money saving and investing than I'm going to be paying in debt services, my money will go to savings and investing 100% of the time.
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Old 07-10-2015, 12:35 PM   #100
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As someone who sells things for a living I can tell you anything purchased with a 0% interest payment plan is not saving you money. The interest charge is never borne by the seller at a detriment to them. The purchaser always bears the interest charge plus the administrative fees of accounting for that debt every month in the form of a significantly higher initial sale price. A cash price negotiated from a market-educated position of strength will always save money. Buying from a seller who maintains lower overhead costs also usually saves money (not American Signature Home Furnishings Gallery Exquisite Extraordinaire Impeccable Deluxe Grande in the fancy plaza by the mall with 0% for 36 on a bedroom suite). Around here there is a guy with a warehouse near the airport with the same furniture for 50-60% of the price, same upholstery patterns, same wood carvings, same factory of origin, different name tags. He doesn't offer financing but he can arrange delivery if needed.

My rule of thumb is to try not to finance any recurring debt on a rapidly depreciating item. Furniture, automobiles, electronics, jewelery (can't believe people do that, but they do) should only be purchased if you can afford to buy them outright that day. If they mean enough to you and you cannot afford them then, gasp, save up the money like a real man and then go buy it like people always did prior to when the "ME" generation of baby boomers came along with their instant gratification lifestyles.
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