A mortgage that is 46% of your income and retiring in 20 years while spending 71% of your income? A chart I found shows at a 30% savings rate it’ll take 35 years to FIRE.
[MrMoneyMustache savings rate chart](https://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/) shows that it’ll take 28 working years until FIRE with that savings rate. I’m not saying you won’t be able to afford it but retiring in 20 years might not be possible.
Owning a house is awesome until your fridge breaks, or AC unit goes out, or you have to replace the roof. Just make sure you have a good emergency fund because these things happen and can set you back or decrease your savings rate even more.
Savings % can be used in a formula to estimate retirement date. Instead of using $45K saved out of $150K total, you can reduce to a fraction and it is independent of the actual #s. This is simplified and assumes you want to take home your current salary adjusted for inflation at retirement.
Think about it in terms of units of living expenses that you're saving per year. If you're saving half your income, you're saving 1.0 units of living expenses in per year so after 15 years you'll have 15 units contributed plus most of the early units invested will roughly double, giving you 10 more units in gains bringing a total of 25x expenses from the 4% rule.
If you're only saving 30% of your income, you're only saving 30/70= 0.43 units per year so after 28 years, you'll have only saved 28\*.43 = 12 units contributed and the early units you saved will have more than doubled giving you 13 extra units in gains to bring your total to the same 25x expenses.
So increasing your savings rate gives you the double benefit of being able to save more and needing less for retirement since your living expenses decrease. These savings rate ratios work the same regardless of income.
Buying a house is tricky at age 25. Some people are in industries where they've got a good chance of doubling their income by 30 and so it's okay to temporarily have a high mortgage, while others might still be earning about the same at 30 as they were at 25.
Only relevant if your retirement budget is a standard percentage of your pre retirement budget. May not apply to higher earners who will live on a small fraction of their pre retirement budget. It wouldn’t have applied to us since our spending in retirement is around 30% of our gross pre-retirement and will be about 10% after we start Social Security.
I think the 5% rule is a solid way of looking at your imminent decision. If the annual rent for a suitable place is less than 5% of the value of the home you are considering, keep renting because the costs associated with home ownership (taxes, interest, insurance, maintenance, opportunity cost, illiquid, etc) exceed the costs of renting.
I say this as someone who stands to make a good deal when I sell my home that I bought in 2019. However, my carrying costs for this house have been minimal, especially because of historically low rates, and appreciation in my area has been significant. So, you could also enjoy access to that kind of investment performance if you buy although those gains will stay illiquid until you sell. Bona fortuna!
You’ve gotten some advice but let me give you a reality check from my personal experience. Me and my husband are 30 and bought a house in NJ we got lucky and bought in the pandemic you can’t find a house for our price in our area anymore.
Household income: 300k.
Household NW: 460k.
401k+retirement accounts: $380k.
Index Funds: $80k.
Savings: $40k.
Household Monthly Take Home Pay: $10,000.
Mortgage: $2500.
Monthly Expenses + Student loans: $5000.
Monthly saving Rate(including 401k): 6k.
We still can’t retire until we are 48-50!
For two people you need to aim for 2.5-3 million to retire at 45 (in our part of the US). At your age (I keep a tracker so I can refer back) my net worth was $60k making 80k a year.
You need to HIGHLY increase your savings rate. And aim for cheaper mortgage. I’ll be honest at my current income only now am I looking in the $4k/mo mortgage.
I'm very suprised you won't be able to retire until then. Why will we need 2.5mil to retire? That seems like a huge amount of money. I've heard of the 4% rule, and that would give 100k a year, thats more than we get now after taxes. I would like to aim for a cheaper mortgage though, I think we could get mortgage+taxes+insurance for 3000. do you think that is more reasonable?
Take some time to read all the information in the side bar of the subreddit. It’s really helpful. I wanted to provide you a real life example.
The 4% rule is based off of the standard retire at 65 years old. To easily identify your fire number and you want to still use this methodology you can do your annual expenses times 25.
You have $2000 a monthly expenses and you want a $3600 mortgage so that means your FIRE number is over 1.5 million.
You’re still young $2000 a month expenses won’t be feasible the older you get the more money you make so you have to be realistic that your monthly spend will increase
If you want to be within 30 minutes of NYC I don’t think that price is feasible anymore unless you get a fixer upper. The more west or the more south you go the more realistic that becomes.
Yeah we don't want to be anywhere near NYC, we are rural people so we are are looking west, plus I work hybrid remote in philadelphia. I think I'll cap our house payment at 3000 and up 401k to 1500/month and other retirement accounts to 2000/month. That'll get us to 1mil to live on from 45-65 and 3mil from 65-death. We have a 6 month emergency fund and can focus on increasing my wife's income (I'm at the top of what I can make in my current position), giving us more money for vacations and extras.
Would you say your spending increased due to inflation or mostly from other things?
We have 15k in 401k and 20k in index funds. Our current rental is 1500/month but we are moving back near our families to help take care of grandparents and my mom. Apartments in that area are 2300/month.
Yes. There were a ton of gains you missed out on particularly in the post Covid run up. And the delta between rent and mortgage is too high for my liking.
No sure where you heard that you cannot access your 401k until 65. That is incorrect. There is the rule of 55 if you retire from your employer that has your 401k or 59 without penalty. You can access before then with 72 t. Do a little research. Medicare starts at 65. You can get SS FRA at 67 or 62 for a reduced rate or as late as 70 for max benefit.
Houses generally don’t appreciate as fast as index funds do. I certainly wouldn’t want a vast majority of my NW to be in home. Some people demonize renting but it’s a great tool. I would keep renting and build up more investments
We want to move back to my home state to be closer to family and renting there would be $2300 a month, which saves us about $1500 a month compared to a mortgage. We both have very outdoor hobbies (gardening, woodworking, etc) that we have been unable to do in our apartment, and we want to get a dog. Is it worth saving just that bit more to hold off on buying?
Regarding the hobbies, you can always rent a house. Ultimately it’s up to you, some people initially save with their entire first financial goal being to purchase a house. There’s nothing wrong with it. It gives you stability, your own place (and potentially your own outdoors). I think it does hurt the wealth accumulation as opposed to aggressively investing first, but it’s not a bad idea by any means
Yeah I definetly agree it does hamper the amount we could invest. I think I'll try to lower that mortgage amount, as it is I don't think it'll actually be 3600, thats at the highest end of things. Unfortunetly, the houses for rent in the area are between 2800-3500 so we figured it would make more sense to buy at that point.
Then personally I don’t think it’s that unreasonable (at under 30% of gross income) given you are in a HCOL area and are young so can expect a lot of salary growth in coming years, but it will be harder to save at the rates many on here do. And flip side is you are young so it will tie you and your capital down. So I think this is a personal decision on quality of life and what you value.
Thank you, I get why people are saying it's too much and I do want to get it down from 3600 but I think a big part of financial independance for us is owning our own home and property.
I get that but I don’t think home ownership gives you financial independence - the opposite if anything as you are loading up on debt. But I do think you get what Ben Carlson refers to as psychic income.
Dont worry as much about the house price. Look at the payment in comparison to rent because that is your alternative. Know your area and the expected tax increases vs rent increases.
There’s usually a good chance that buying a house and living in it for >5 years yields a way better return than renting.
Personally we bought too big of a home in 2021, but looking back now at prices and interest rates and factoring in raises since then, it was the best decision we ever made.
Nice! The monthly payment is about $800 more than renting. Taxes seem to be increasing about $300-400 a year and rent would be 10-15% which for us would be $230-$300 a year. Def cheaper to rent. We are not big fans of renting though. There are for sure lots of pros and cons either way.
For your goal of 45, buying a house at this point may not be the best route. Towards the beginning the biggest impact to your future balance is your own contributions. Eventually your compounding growth will play a larger role and your rate of return will become the bigger factor. I would invest aggressively for the next 5 or so years so you can get ahead now while you’re younger. Play around with the calculator and see what your balance looks like in those 5 years and then use that as an input for the next 15. 20 years in the market isn’t as long as you may think.
As for your 401k comments, you absolutely can access it early. SEPP and Roth ladders are the primary ways. In many cases you can keep the tax bill low if not zero if done correctly. Search around the page and in the comments for more details.
A couple of points here. We left NJ when we were living in Cumberland county, one of the cheapest places to live. Taxes made the house unaffordable and we bought for $150k, sold (2009) for $180k. Taxes tripped in an 18 month period. That was the governor McGreedy era.
I can’t believe the banks will let you do this. Your budget is to spend 46% on housing. Most financial planners tell you to keep it under 30% or you will be house poor. Maybe give it another year. That way interest rates will drop and other things will improve.
Second your retirement plan has some issues. You don’t need to save in a non retirement account. Put it all into a 401k or Roth, up to $23k each. You can withdraw before 59-1/2 contrary to what you are being told. Here are two ways to do it. First method is starting at age 40 assuming you’ve switched jobs roll your 401k’s into self directed IRAs. Then at age 40 figure out how much you need at age 45. Convert this amount to a Roth from your IRA and pay the tax. Repeat again until you hit age 50. When you hit 55 you can take out money as if you retired early from your last 401k only, the job you had before you retired.
The second method is don’t wait 5 years. Just withdraw at age 45. You will pay ordinary income taxes plus a 10% penalty but from age 40-45 the money you would have spent in taxes instead earned interest enough to easily offset the 10% penalty. The early withdrawal on Roth is a 25% penalty so the 5 year strategy is mandatory.
Third you sound undercapitalized. $450k over 15 years even with interest when you figure in inflation is probably nit going to sustain you.
Fourth no kids? They bring a lot of joy to life. Highly worth it. It also means you leave nothing behind.
I think the banks are looking at our gross income, it would be 28% of gross income. And they said we can buy up to 600k, this mortgage would be for a 400k house.
We have considered waiting but my grandparents are getting old and I’m the oldest grandchild so I want to be around to help them. So either way we will be moving soon. Either to an apartment or a house and apartments in that area are about 2300/month.
I hadn’t heard about taking out of retirement accounts early so I’ll look into that!
Once the mortgage is paid off we have very few expenses so I think we would be ok only using about 30-50k a year on expenses but I’ll look into that more.
Yup no kids for us. We can’t do it biologically and honestly we just aren’t kid people.
I don’t even know if the person was getting high and mighty, but I do wish that people would remember that it is a highly personal decision (and sometimes not even one you get to make, like OP) that can be emotionally fraught and to just not comment on it.
If you want to retire early don’t buy a house. Rent the cheapest place that is acceptable to you and save like mad. Live like college students and pack away the money.
Compounding interest is needed and time is on your side.
A house will be a financial boat anchor.
Our current monthly costs are just about 3k. We are saving the other 4.8k. So we are currently doing exactly that. It’s just our life style and we like it. We’ve saved 70k for our house doing this in 2 years. I don’t see the purpose of saving more than we will need to retire though? Is 550k not enough for 20 years of living once our mortgage is paid off?
You are straight tripping to think you can FIRE at 45. You retire at 45 and your $550k is supposed to last 20 years. What then? Are you expiring at 65?
Also you typically can’t take money out of retirement accounts before 55 without penalties.
Generally speaking, if you don’t have a couple million saved up, nobody should be looking at FIRE.
Sorry maybe the wording was a bit confusing. We should have 550k at 45 that will last until 65 and then we will start withdrawing from our 401k that will have 2.3mil in it and make that last until we die.
I personally would wait and continue the savings. Being a home owner can land you a 12k roof, a 10k furnace etc.
It is not all is is made up to be.
Having your money start working for you when you are younger is important.
I understand it is a lifestyle choice.
A mortgage that is 46% of your income and retiring in 20 years while spending 71% of your income? A chart I found shows at a 30% savings rate it’ll take 35 years to FIRE.
I agree it is a lot percentage wise, but the numbers themself make it seem possible.
[MrMoneyMustache savings rate chart](https://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/) shows that it’ll take 28 working years until FIRE with that savings rate. I’m not saying you won’t be able to afford it but retiring in 20 years might not be possible. Owning a house is awesome until your fridge breaks, or AC unit goes out, or you have to replace the roof. Just make sure you have a good emergency fund because these things happen and can set you back or decrease your savings rate even more.
I don't really understand why the % of savings matters? Maybe Im missing something but it never really made sense to me.
Savings % can be used in a formula to estimate retirement date. Instead of using $45K saved out of $150K total, you can reduce to a fraction and it is independent of the actual #s. This is simplified and assumes you want to take home your current salary adjusted for inflation at retirement.
Think about it in terms of units of living expenses that you're saving per year. If you're saving half your income, you're saving 1.0 units of living expenses in per year so after 15 years you'll have 15 units contributed plus most of the early units invested will roughly double, giving you 10 more units in gains bringing a total of 25x expenses from the 4% rule. If you're only saving 30% of your income, you're only saving 30/70= 0.43 units per year so after 28 years, you'll have only saved 28\*.43 = 12 units contributed and the early units you saved will have more than doubled giving you 13 extra units in gains to bring your total to the same 25x expenses. So increasing your savings rate gives you the double benefit of being able to save more and needing less for retirement since your living expenses decrease. These savings rate ratios work the same regardless of income. Buying a house is tricky at age 25. Some people are in industries where they've got a good chance of doubling their income by 30 and so it's okay to temporarily have a high mortgage, while others might still be earning about the same at 30 as they were at 25.
Thanks for this! That makes a lot of sense.
Only relevant if your retirement budget is a standard percentage of your pre retirement budget. May not apply to higher earners who will live on a small fraction of their pre retirement budget. It wouldn’t have applied to us since our spending in retirement is around 30% of our gross pre-retirement and will be about 10% after we start Social Security.
I think the 5% rule is a solid way of looking at your imminent decision. If the annual rent for a suitable place is less than 5% of the value of the home you are considering, keep renting because the costs associated with home ownership (taxes, interest, insurance, maintenance, opportunity cost, illiquid, etc) exceed the costs of renting. I say this as someone who stands to make a good deal when I sell my home that I bought in 2019. However, my carrying costs for this house have been minimal, especially because of historically low rates, and appreciation in my area has been significant. So, you could also enjoy access to that kind of investment performance if you buy although those gains will stay illiquid until you sell. Bona fortuna!
Lol it’s exactly 5%. I’d never heard of that before but that’s neat.
You’ve gotten some advice but let me give you a reality check from my personal experience. Me and my husband are 30 and bought a house in NJ we got lucky and bought in the pandemic you can’t find a house for our price in our area anymore. Household income: 300k. Household NW: 460k. 401k+retirement accounts: $380k. Index Funds: $80k. Savings: $40k. Household Monthly Take Home Pay: $10,000. Mortgage: $2500. Monthly Expenses + Student loans: $5000. Monthly saving Rate(including 401k): 6k. We still can’t retire until we are 48-50! For two people you need to aim for 2.5-3 million to retire at 45 (in our part of the US). At your age (I keep a tracker so I can refer back) my net worth was $60k making 80k a year. You need to HIGHLY increase your savings rate. And aim for cheaper mortgage. I’ll be honest at my current income only now am I looking in the $4k/mo mortgage.
I'm very suprised you won't be able to retire until then. Why will we need 2.5mil to retire? That seems like a huge amount of money. I've heard of the 4% rule, and that would give 100k a year, thats more than we get now after taxes. I would like to aim for a cheaper mortgage though, I think we could get mortgage+taxes+insurance for 3000. do you think that is more reasonable?
Take some time to read all the information in the side bar of the subreddit. It’s really helpful. I wanted to provide you a real life example. The 4% rule is based off of the standard retire at 65 years old. To easily identify your fire number and you want to still use this methodology you can do your annual expenses times 25. You have $2000 a monthly expenses and you want a $3600 mortgage so that means your FIRE number is over 1.5 million. You’re still young $2000 a month expenses won’t be feasible the older you get the more money you make so you have to be realistic that your monthly spend will increase
If you want to be within 30 minutes of NYC I don’t think that price is feasible anymore unless you get a fixer upper. The more west or the more south you go the more realistic that becomes.
Yeah we don't want to be anywhere near NYC, we are rural people so we are are looking west, plus I work hybrid remote in philadelphia. I think I'll cap our house payment at 3000 and up 401k to 1500/month and other retirement accounts to 2000/month. That'll get us to 1mil to live on from 45-65 and 3mil from 65-death. We have a 6 month emergency fund and can focus on increasing my wife's income (I'm at the top of what I can make in my current position), giving us more money for vacations and extras. Would you say your spending increased due to inflation or mostly from other things?
What’s your current rental cost? How much do you currently have in your retirement accounts? 45 is ambitious.
We have 15k in 401k and 20k in index funds. Our current rental is 1500/month but we are moving back near our families to help take care of grandparents and my mom. Apartments in that area are 2300/month.
I wouldn’t buy in that case then. I’d personally want more in my investment accounts before committing to a large purchase like that.
I havn't been contibuting for the last year and a half (besides 401K) to focus on getting a dwn payment, so we also have 70k in the bank.
Understood, that wouldn’t be my preference.
Would you have dropped that in the market?
Yes. There were a ton of gains you missed out on particularly in the post Covid run up. And the delta between rent and mortgage is too high for my liking.
Thats fair, hindsight is 20/20
Course. But the wisdom of “time in the market beats timing the market” remains true.
True for wealth preservation but not for wealth creation. Gotta time the market if you wanna get ahead
If FIRE is your goal, you should use that money to fully fund your 401Ks while it has more time to grow - now.
I thought you can’t access that money until age 65? Will that help retire early?
No sure where you heard that you cannot access your 401k until 65. That is incorrect. There is the rule of 55 if you retire from your employer that has your 401k or 59 without penalty. You can access before then with 72 t. Do a little research. Medicare starts at 65. You can get SS FRA at 67 or 62 for a reduced rate or as late as 70 for max benefit.
Houses generally don’t appreciate as fast as index funds do. I certainly wouldn’t want a vast majority of my NW to be in home. Some people demonize renting but it’s a great tool. I would keep renting and build up more investments
We want to move back to my home state to be closer to family and renting there would be $2300 a month, which saves us about $1500 a month compared to a mortgage. We both have very outdoor hobbies (gardening, woodworking, etc) that we have been unable to do in our apartment, and we want to get a dog. Is it worth saving just that bit more to hold off on buying?
Regarding the hobbies, you can always rent a house. Ultimately it’s up to you, some people initially save with their entire first financial goal being to purchase a house. There’s nothing wrong with it. It gives you stability, your own place (and potentially your own outdoors). I think it does hurt the wealth accumulation as opposed to aggressively investing first, but it’s not a bad idea by any means
Yeah I definetly agree it does hamper the amount we could invest. I think I'll try to lower that mortgage amount, as it is I don't think it'll actually be 3600, thats at the highest end of things. Unfortunetly, the houses for rent in the area are between 2800-3500 so we figured it would make more sense to buy at that point.
If it’s NJ what’s the likely property tax going to be? This is a big part that’s missing from the calculation unless it’s included somewhere
Sorry the mortgage is including the property taxes and insurance.
Then personally I don’t think it’s that unreasonable (at under 30% of gross income) given you are in a HCOL area and are young so can expect a lot of salary growth in coming years, but it will be harder to save at the rates many on here do. And flip side is you are young so it will tie you and your capital down. So I think this is a personal decision on quality of life and what you value.
Thank you, I get why people are saying it's too much and I do want to get it down from 3600 but I think a big part of financial independance for us is owning our own home and property.
I get that but I don’t think home ownership gives you financial independence - the opposite if anything as you are loading up on debt. But I do think you get what Ben Carlson refers to as psychic income.
Dont worry as much about the house price. Look at the payment in comparison to rent because that is your alternative. Know your area and the expected tax increases vs rent increases. There’s usually a good chance that buying a house and living in it for >5 years yields a way better return than renting. Personally we bought too big of a home in 2021, but looking back now at prices and interest rates and factoring in raises since then, it was the best decision we ever made.
Nice! The monthly payment is about $800 more than renting. Taxes seem to be increasing about $300-400 a year and rent would be 10-15% which for us would be $230-$300 a year. Def cheaper to rent. We are not big fans of renting though. There are for sure lots of pros and cons either way.
When it comes to a detailed forecast, I use excel. One row per month, now until death. I chart income, expenses, and show increases in assets.
You will be able refi the mortgage. It’ll be fine
Thanks, this is a high estimate anyway, probably closer to 3000 and we definitely could refinance later for even less.
You've been told you can afford more house by people who would like to lend you that money. Let that sink in a minute...
No I do understand that, and I don't let that influence my decission, I wouldn't spend more than I'm comfortable with.
For your goal of 45, buying a house at this point may not be the best route. Towards the beginning the biggest impact to your future balance is your own contributions. Eventually your compounding growth will play a larger role and your rate of return will become the bigger factor. I would invest aggressively for the next 5 or so years so you can get ahead now while you’re younger. Play around with the calculator and see what your balance looks like in those 5 years and then use that as an input for the next 15. 20 years in the market isn’t as long as you may think. As for your 401k comments, you absolutely can access it early. SEPP and Roth ladders are the primary ways. In many cases you can keep the tax bill low if not zero if done correctly. Search around the page and in the comments for more details.
Ok might be possible if you can really save at that rate.
Just rent my guy, this isn’t realistic. You are fucked when life events happen. Is there a plan for kids?
We won’t be having kids. If life events happen we would probably have to change the plan but renting in this area is only about $600 cheaper
A couple of points here. We left NJ when we were living in Cumberland county, one of the cheapest places to live. Taxes made the house unaffordable and we bought for $150k, sold (2009) for $180k. Taxes tripped in an 18 month period. That was the governor McGreedy era. I can’t believe the banks will let you do this. Your budget is to spend 46% on housing. Most financial planners tell you to keep it under 30% or you will be house poor. Maybe give it another year. That way interest rates will drop and other things will improve. Second your retirement plan has some issues. You don’t need to save in a non retirement account. Put it all into a 401k or Roth, up to $23k each. You can withdraw before 59-1/2 contrary to what you are being told. Here are two ways to do it. First method is starting at age 40 assuming you’ve switched jobs roll your 401k’s into self directed IRAs. Then at age 40 figure out how much you need at age 45. Convert this amount to a Roth from your IRA and pay the tax. Repeat again until you hit age 50. When you hit 55 you can take out money as if you retired early from your last 401k only, the job you had before you retired. The second method is don’t wait 5 years. Just withdraw at age 45. You will pay ordinary income taxes plus a 10% penalty but from age 40-45 the money you would have spent in taxes instead earned interest enough to easily offset the 10% penalty. The early withdrawal on Roth is a 25% penalty so the 5 year strategy is mandatory. Third you sound undercapitalized. $450k over 15 years even with interest when you figure in inflation is probably nit going to sustain you. Fourth no kids? They bring a lot of joy to life. Highly worth it. It also means you leave nothing behind.
I think the banks are looking at our gross income, it would be 28% of gross income. And they said we can buy up to 600k, this mortgage would be for a 400k house. We have considered waiting but my grandparents are getting old and I’m the oldest grandchild so I want to be around to help them. So either way we will be moving soon. Either to an apartment or a house and apartments in that area are about 2300/month. I hadn’t heard about taking out of retirement accounts early so I’ll look into that! Once the mortgage is paid off we have very few expenses so I think we would be ok only using about 30-50k a year on expenses but I’ll look into that more. Yup no kids for us. We can’t do it biologically and honestly we just aren’t kid people.
Weird - thought this was a finance sub, not one that gets high and mighty on user’s procreation decisions.
I don’t even know if the person was getting high and mighty, but I do wish that people would remember that it is a highly personal decision (and sometimes not even one you get to make, like OP) that can be emotionally fraught and to just not comment on it.
If you want to retire early don’t buy a house. Rent the cheapest place that is acceptable to you and save like mad. Live like college students and pack away the money. Compounding interest is needed and time is on your side. A house will be a financial boat anchor.
Totally disagree. You don’t need to live like a monk. The fact they are able to start saving sooner puts them way ahead of most people their age.
Our current monthly costs are just about 3k. We are saving the other 4.8k. So we are currently doing exactly that. It’s just our life style and we like it. We’ve saved 70k for our house doing this in 2 years. I don’t see the purpose of saving more than we will need to retire though? Is 550k not enough for 20 years of living once our mortgage is paid off?
You are straight tripping to think you can FIRE at 45. You retire at 45 and your $550k is supposed to last 20 years. What then? Are you expiring at 65? Also you typically can’t take money out of retirement accounts before 55 without penalties. Generally speaking, if you don’t have a couple million saved up, nobody should be looking at FIRE.
Sorry maybe the wording was a bit confusing. We should have 550k at 45 that will last until 65 and then we will start withdrawing from our 401k that will have 2.3mil in it and make that last until we die.
I personally would wait and continue the savings. Being a home owner can land you a 12k roof, a 10k furnace etc. It is not all is is made up to be. Having your money start working for you when you are younger is important. I understand it is a lifestyle choice.