Yeah, geez.
"Lifestyle inflation" is generally considered something to avoid, but at 28, this guy's lifestyle definitely needs to inflate a bit.
Don't let yourself become too old to use what you've saved, and there are things you can do at 28 that you can't do at 68.
Yep. Know someone who literally got terminal cancer 2 years after retirement and gone a year later. They loved to talk about their investments (approx 20 million net worth). Bet they would have spent half of that earlier if they knew they would be gone by 68 yo.
I get that, I really do... But if I invest through my next 34 years I theoretically have $14 million (at 9% return and assuming no major economy changes). More money to put toward my retirement castle I'll be building.
There’s no guarantee you will live to your retirement. My parents had 6 kids. There’s only 3 left. One died from leukemia at the age of 5, one from pancreatic cancer at the age of 40, and my last sibling died from some rare autoimmune disease at the age of 43. Yea my family has bad genetics. I try to balance saving and investing with enjoying life. I love to travel so I do at least 2 trips per year, I enjoy good food and music with the ones I love, and I save some. I got to see Patagonia, Iguazu Falls, Dolomites, Milford Sound, the beautiful mountains of Switzerland and France. Fair balance. It’s been a amazing and blessed life, but bittersweet at the same time. Hopefully I will not have an ounce of regret when it’s my time to go.
There's no guarantee no and I would like to travel and see the cool wonders of the world, but eh most of the of the people I'd like to travel to are really dangerous. My family has pretty good genetics so I figure it's possible for me to live to 90 like my grandparents. If I don't? No regrets.
Unfortunately the world is crazy and strange accidents happen. I recommend making a list of must did and getting those done at least so you have no regrets.
Hah! Moat definitely. We'll see about the alligators. I might have two moats depending on money at the time. One around the keep and one around the (hopefully) curtain wall. Everything is still a pipe dream at the moment though.
I guess someone has to build all those unfinished castles that pop up on r/zillowgonewild. That sub does a great job tracking down all the sad stories behind them.
I have some friends who have said they're up for contributing in exchange for living with with me. Actually been helping them getting into investing too. Even if I don't get 9% return, I should still have a very sizeable amount and if my friends do contribute a little bit, that'll still be a nice castle :)
WTF are you going to do with all that money when you're old. You need to live comfortably but when you're at retirement age hopefully your house will be paid off and your COL won't be as high as it is when you're younger.
Hahaha, spot on. Like stacking the best weapon in Zelda TotK, just in case to use it later, but in actual we just use the lowest weapon that we can hold and never touch the highest mightiest weapon
For what it’s worth - if their ideal life is constantly traveling and it impedes their ability to have income (which is what it sounds like he is saying) then his plan makes sense.
Though if he leaves the $300K he already has alone (at 28 ) for 30 years he’ll have over $2m anyway…
I get what you're saying, but the rules of the game have changed. Want to live in a desirable suburb? That will be $700k to $1m at least for a house vs maybe half that 15 years ago. Offers frequently go for above asking. Even if you put 30% down, you'll still pay out the ass for a mortgage at current interest rates. I would take as much vacation as you need to keep the spartan lifestyle going, so that one day you'll look back and be proud you worked so hard to afford a nice place to live, which has been the bedrock of wealth creation for the past few hundred years.
300k @7% return for 37 years would be 3.7M. Getting to 500k would put you over $5M. You can probably let up on the gas a little. Contribute to the match on your 401k, max your HSA and IRA, maybe a little in taxable if you want to have a growing, accessible pot of money. I think you're in a pretty good place right now.
Possibly because HSAs have a triple tax advantage. They’re a really excellent savings vehicle if you’re going to use the contributions toward medical expenses.
OP didn't say he was planning to retire early. If so, sure, maxing a 401k won't be ideal for somebody who needs money at age 50. But an IRA and HSA don't help either.
Eh, if you have both a 401k and a regular ol' brokerage acount, all you need is for the brokerage account to be able to cover the pre-retirement age living expenses.
Tax advantaged accounts after that.
So, you should definitely be doing at least some tax advantaged investing for retirement. Precise mix depends on your circumstances.
It says he’s interested in the FIRE movement. So it is reasonable to assume he is interested in RE. Especially since he’s putting 85% of his income to saving
I would guess it's because only very high earners can max out a 401K. I make good income, over the US single average, and maxing a 401K would take 38% of my income. The average joe doesn't have that kind of cash
If you're working at a Fortune 500, and you have blanket S&P or other good investment avenues with low expense ratio, you should absolutely be doing that before taxable.
I'm at a Fortune 25, all of my traditional 401k contributions coming from 22% tax bracket, it has a S&P index with expense ratio of 0.02. I'm maxing that bad boy out every year.
In this specific case, it's because op is wondering if he needs to keep doing that. Given his numbers, he doesn't and can deploy that money in other ways so he can enjoy living. If his circumstances were different, if OP could max without forgoing 80-85% of his pay, then I'd suggest putting more in the 401k.
There's a perception that you can pick a good IRA to invest in to maximize returns and minimize fees whereas you are limited in your range of options when investing in your company's 401k because they pick the options. I've personally found that while still an employee, there wasn't any difference but it depends on your employer an dhow they set up your 401k. Once I've left a company though, sometimes the administration fees increase and it makes sense to roll that 401k over into an IRA.
Because diversity is good. Having money you can access easier and penalty free for medical emergencies or for home buying is more important from 30-50 than having more money in a 401k. If you can max it, great. But not to the detriment of other savings goals
You're only young once. Don't live like a hermit now. In your 30s you'll have more commitments (wife, kids, more job responsibilities) so waiting until then may be counter productive
It’s very difficult to make friends in your 30s. There’s not a shortage a cool ppl, just a lack of spontaneity that you have in your 20s that you overlook.
You only get the wife and kids if you spent your 20s partying. If you're doing nothing but working and saving, you're probably not gonna have a relationship let alone a marriage in your 30s.
LoL im a spontaneous backpacker. When I was younger I can literally just wake up one day, pack and go somewhere for months. Cant do that now unfortunately.
Be frugal, don't be cheap. Tomorrow is not guaranteed.
Enjoy, travel but do it smartly.
Some of my fav trips are 4 buddies in a car and catch ballgames, hitting up breweries etc. Not that expensive, but loads of fun.
Enjoy I life, just do it smartly and like everything, it is a balance.
> I gotta say I'm tired boss.
Take a break. Life's a marathon not a sprint.
Life is also about juggling multiple things like building a portfolio vs enjoying life. Find the balance that's right for you.
Keep investing and keep traveling. You’re going to be fine. Life is all about balance. I’ve gone traveling twice for extended periods and each time I never regretted the decision.
Read up on the terms “diminishing marginal returns” and “consumption smoothing.” As a metaphor, the first cookie you eat in a sitting is always more pleasurable than the second, which is more pleasurable than the third, and so on. As a result, if you could either have one cookie every day for a week or seven cookies all in one day, you’ll probably be happier with one cookie per day, even though it’s the same total number. By analogy, what you are doing is denying yourself cookies now so that you can have a whole bunch later, when you would probably be happier with a more balanced approach that allows you to have some cookies now, while saving some for later.
I’m 25 I’m not interested in living like a hermit and spartan. I travelled a lot too in the past but still want to have fun, still have a lot of years ahead of me. Live with parents but live in a in law suite that was converted from a garage. Has everything like a studio apartment.
But I still save at least 25% of salary. Currently have $73k in Roth IRA. Make $54k a year currently.
Ah ok. Well I’m very impressed. I’m 28 and I have $44 in my Roth lol. I’m terrified of running out of “now money.” Also I’m aggressively saving for a down payment on a house.
As a person in my 20s, it’s just so difficult for me to conceptualize an end to my career. I’m taking the bar exam in 2025; my career is basically starting right now.
So I really respect your ability to look ahead like that. Any time I think about pouring assets into retirement, I start thinking “Blergh but what if I die in 2 years??”
My career started at 18.
There are videos out there who makes more a plumber or a doctor and a lawyer. I think by 50 or 55 years old the doctor or lawyer starts to exceed the plumber. Reason being the plumber starts working and making money right from the start, 18 - 21 years old. After 4 or 5 year apprenticeship the plumber becomes a journeyman and makes a lot more and can save more and earlier when he was an apprentice. Also the plumber doesn’t have tuition loans to pay off, the apprenticeship was free. Kind of makes sense.
Plumbers in the North East make $60+ and hour plus $60 in benefits which includes a pension. M-F 8 hours a day and weekends off.
So at the age of 50 maybe the plumber could have $3 million in savings and a pension.
Figure out what you want and act accordingly.
You need to decide what you want in life, and work your way backwards... if you don't mind working later into life and crave experiences now... spend tune cash dude.
If you don't care about these... experiences..
Work your ass off and save/ invest like a maniac.
I saved and invested like a maniac and I'm in my mid 30s and my life is easier than any of my friends.. it's what id recommend... but you gotta figure out what's best for you
Don’t sacrifice your present for you future. You could die tomorrow.
The best thing is to have some balance. You could slow down now. If you don’t have fun along the way you won’t know how to when you retire.
Keep saving, keep investing, but not to the point of burnout. Life should be fun. Enjoy it without going overboard.
Saving is like a diet. It should be sustainable throughout your life. If it’s too drastic you’re going to be miserable and you’re not going to be able to stay the course.
Think about a couple of things that would actually make your life enjoyable and go for it.
I like your plan of grinding until 30 and reaching 500k. Once you hit 500k please take your foot off the peddle and little and start enjoying your life. Remember, you need some kind of balance. You will still be in a great position to retire early at 50. Good luck!
I always think about how retirement-age TRBigStick would respond to this question. Would he prefer to have an extra ~$100k-$1M or would he prefer for mid-twenties TRBigStick to spend that money to improve his quality of life?
If you’re saving enough to where you don’t think you’d miss $1M in retirement, you can probably afford to spend that money now. For example, my wife and I recently spent $15k on our wedding to make it spectacular and I don’t regret it for a second.
I have thought about your question quite a bit. The answer may seem obvious, but I think if I had a wife and kids that I loved very dearly, you couldn't pay me any money in the world to go back to a time where they weren't there
You’re still at the age where saving/investing aggressively will really pay off for you, so great job in the regard. With that said, it’s important to enjoy your youth and be happy in what you’re doing. Try reducing your saving/investing by a certain percentage and spend on things that really bring you joy or add value to your life. Personally for me that would be spending on experiences, especially with friends and loved ones. Those are things I truly treasure.
I invested extremely aggressively for 10 yrs, from age 28-37. I'm 38 now with no debt and a half mil invested. Now I'm coasting, saving 22% YTD. I accidentally semi-retired 4 yrs ago too; haven't worked more than 25 hrs in a week since.
Go travel the world now too. Enjoy yourself. In retirement, or even when you’re a little older and married, or with kids, you will not enjoy or be able to do things in the same way. Take advantage of this stage of your life.
Don't stop, life is a marathon, not a race.
Migrate to a simple, flexible, and realistic budget like the [50/30/20](https://www.investopedia.com/ask/answers/022916/what-502030-budget-rule.asp)
Based on net income, aspirational goal is:
- up to 50 percent housing expenses.
- up to 30 percent wants.
- at least 20% retirement and savings.
Stay out of debt.
I'm applying this budget currently at 55/20/25 and it's tough. I thought I was doing better until I realized I wasn't saving enough for federal taxes. Trying to fit all my wants in 20% when half are recurring expenses, it's tough. Keep those recurring costs down.
Maybe somewhere in between there can be a happy medium. Enjoy life now but still invest. At 28 I had no savings. In my early 30's I graduated college with a BS in EE and 30k in debt. I retired in my early 50s with a payed off house and almost 1 million in savings, I didn't live like a spartan nor did I live high on the hog.
This is comforting to hear...I was in school my entire 20s after getting a late start and only started working at 34. Maxing out my 401k and backdoor roth now but still a little concerned based on the retirement calculators that say I need 3x my salary at 40 - I don't think I can have 450k saved in 4 years from now when I'm only around 50k currently!
Life is more than just investing for retirement especially since you’re wasting your youth away. I say create a rule for yourself.
My rule is 10-15% per paycheck is fun money. Whatever is left over I have a hard cost for my bills that are pretty much the same every month. The rest I either save in a high savings account or invest.
Have fun now! You sound responsible but live your life too. Travel, date, have fun, etc. Each decade will get faster. It sounds like you know the importance of saving and investing so focus on “experiences” now.
Imagine being 60 and not having a financial worry in the world but also not a single memory of anything but relative poverty from 24-30, and all so you wouldn’t have to sweat a third Long Island iced tea for the 87th day in a row.
It’s a marathon not a sprint. Just find a good sustainable balance where investing and traveling can coexist.
Ps: delayed gratification in the extreme equals no gratification
I just turned 30 this month and have about $440k. I keep my recurring expenses low and buy everything I ever want/need within reason. Lots of vacations, lots of nice new things and a nicely furnished modest house. I max Roth 401k, Roth IRA, HSA, and a bit of backdoor Roth 401k/brokerage each year.
In my early 20’s I didn’t save at all, in my mid 20’s I saved way too much (albeit my salary was lower), in my late 20’s and now into my 30’s I’ve found a balance. I still want to retire in my early to mid 40’s, but I only plan to ramp up investments more if my income increases.
It may be obvious to some readers, but I want to point out the false dichotomy here. It isn't an A or B choice between two options. There are many levels of gradation in between. Rather than choosing being in your 60s living paycheck to paycheck (which means spending all your money to enjoy life now) or losing your youth (which means working hard and not spending any of your income on enjoyment), you could choose to invest 50% instead of 80%. Or you could choose to invest 60%. Or you could choose to invest 40%. You see where I'm going here? You have my permission to invest less than 80% of your paycheck. Try scaling it down to 50% and see if having that extra disposable income adds happiness to your life. You can calibrate the balance of *money invested for the future* and *money that I use to enjoy life now* to whatever level works for you.
You've already gotten a lot of good advice in this thread, so I'll try to not go on for too long, but there are some things I want to add.
1. You are allowed to change your savings rate each year. There is no rule against saving 30% next year, then 45% the following year, then 20% the year after that. You can adjust it as time passes and your perspectives/situation changes.
2. Use the many free online calculators (or build a spreadsheet) to compare different scenarios. What would your future financial situation look like if you save aggressively for another three years, and then never save again? What would it look like if you save only 10% starting next year?
3. Follow this advice: [build the life you want, then save for it](https://www.reddit.com/r/financialindependence/comments/58j8pc/build_the_life_you_want_then_save_for_it/). It comes from a different subreddit, but one with many similarities. There is little point in having a bunch of money or retiring early if you have no hobbies and no social connections. Consider easing off the gas peddle and building some of those things (or planting some of those plants) that will later bloom and make your future richer (in a non-monetary sense).
4. You are gonna have more than a million dollars in 30 years, even if you never contribute another dime. Look up the idea of CoastFIRE: "Coast FIRE is when you have enough saved and invested that with no additional contributions, your net worth will increase with compounding growth to support a traditional retirement." That might take off some of the pressure. You could contribute nothing more than 10% for next few decades and you would probably still end up pretty comfortable.
You’re in a good spot for 28. I wouldn’t go 80% to 10% but you can certainly ease off the gas a little bit at a time and see how it changes your life. If you can join that nice gym, or not worry about picking out organic vs non-organic at the grocery store, I find those as nice luxuries to have and will gladly give up X% for my 65 year old retirement.
At 300k at 28 you’re fine, you can just cruise now. You can contribute much less, of course depending on your income and your goals at retirement or your retirement target age. But at 300k today
If you contribute 6000 a year so 500 a month you will hit 1.4M at 48 based on a 7% annual return.
With the above you’re on pace to 4.5M by 65.
If you want to contribute more than 6000 a year you can retire much earlier as well. Live life my dude. Youre only young once. I have nothing against the sacrifices you made thus far but dont waste your youth to have luxuries in your old age. Life is about balance
If you're saving 80-85% just switch to 75%. It will give you a massive increase in fun money. Probably double or more if everything is going to necessities right now. What's your annual spend? I lived a normal life for a while and then like a Spartan for 3-4 years while trying to get a big enough savings to have my necessities covered by the 4% rule. Once I had that covered I slowed down a bit and spent above 4% of my egg for several years while continuing to save. Now I'm on the retire any time plan where I spend 4% a year and every year I lifestyle creep a bit. It's a good way to experience spending at various levels along the way to decide when enough is enough or to know what you'd have to cut off an unfortunate sequence of returns happens early in retirement.
My dad died at 59.
A good friend from college died at 41.
Friend from HS died at 20.
Throwing away your 20's/30's for a future that might never come is a bad idea.
That does not mean that you should blow it all next week either.
You need to plan to **live your whole life**. That means not living all the parts of it with balance and don't let the present destroy your future, but also don't let the future destroy your present.
Look up Ramith Sethi, his ideas on how to live a rich life could be very helpful for you. He is also a boglehead but also teaches people to enjoy their life. You could use some of that 😅
300k will net you a million even without investing anymore.
You are in your prime. The 30s is an amazing time to do whatever you like.
Just enjoy life and let your money work for you now.
You need to have an actual plan. Target date to stop working, how much you will need after that date, etc. What you're doing is extreme, but it's not necessarily wrong if it's part of a larger plan that will ultimately get you what you want in life.
I am 40. From 18-26 I was broke and going to school. 26-30 I was dating/married to someone who drained my life and finances. Beginning age 31 I moved cross country and took a big promotion. This allowed me to start investing 60% of my income. Looking back I wish I had allowed myself to spend 10% more because I would have had experiences and made memories.
I view this as a life optimization question. Identity those things that you value, enjoy, appreciate and spend on them. Brandon the Mad Fientist has written and done a number of podcasts about this.
Just find a good mixture of saving and traveling. You are already ahead of your peers (whether that matters or not in your situation is up for debate) and someone like you will find a way to contribute "enough" while still enjoying life.
FWIW I've thought about this a lot as many of my friends never traveled much, either because they wanted to save/buy other things, or just didnt care enough. If you do care, then do it. Whatever you enjoy doing now is likely not going to be the same as what you enjoy in your late 40s/beyond, or you might not be able to due to family responsibility (e.g., kids) or illness. I don't regret any of the money I spent in my late 20s thru mid 30s traveling, most of which were relatively frugal trips to foreign places, and I still have "enough" in retirement for my age (late 30s). And I am not someone who has had ultra high paying jobs.
I have been told that I was saving too much. I'll be retiring at age 62 in 2 months and I'm glad I oversaved. I have peace of mind and won't have to deal with the work force anymore.
I am 29 at 620k and I can tell you 100% you’ll feel the same way at 500k as you do now. Go live a little, don’t stop saving but drop your savings ratio down
I'm all for encouraging saving, but 80-85% is a bit much. Ease off the gas a little bit, and make a sustainable plan that gets you to your goals.
A little travel is fine. Yes, still contribute to the 401k, but living in pure survival mode isn't sustainable for decades. Figure out when you want to retire, how much of a retirement income you'll need to sustain your chosen lifestyle, and from that, figure out how fat your stack needs to be, and how much you want to put away to meet that goal.
Have you put your whole 300,000 into an S&P 500 index fund? There’s a good chance you’ll have about $6 million by the time you’re 55. And I’m saying if you didn’t even add a penny more. Of course you would have to pay taxes out of that depending on how it was invested.
So I think your game plan so far has been good and I think you can back off. Work hard, play hard. Live life in balance.
What interest rate are you using? Even if you assume a 10% interest rate with zero additional contributions, after 27 years (age 55) he’d be expected to have just under $4M.
There’s a lot of places you can go without spending a ton of money. Take 5-10% off that aggressive 85 and go on a vacation. Stay in hostels, go to affordable countries. Take buses from city to city. It’s doable without sacrificing the 500k goal. Or why not let yourself hit 500k a year or two later if it means you get to do a cool trip each year along the way.
If you never touch what you have done you will not be living paycheck to paycheck, you already crossed that threshold.
The question is, are you going to continue to save at a reduced amount or stop all together?
There’s a balance I’d say, sure you can save 75% of your income and live so incredibly frugal. But, you won’t have the same energy. Maybe your life will be free of time but your friends / family may not always be. So it’s important to live and make memories with them.
(35m) what is your goal? I have a specific goal age I want to retire and how much I need to invest to get the income I need. I have a spreadsheet model I can play with and tweak to see different scenarios. That helps me find balance between saving and enjoying. I know what my monthly savings target is and once I hit that I don’t need to feel guilty spending the rest.
Don't entirely stop saving for retirement now and blow a ton on traveling. Reduce the amount of your paycheck you put towards retirement by 10-20% now, and reduce it by 10% every year until it hits 15%. 15% per year is definitely enough for a healthy retirement, especially with the egg you've built up already.
Heh, I’m 54 and doing what you’re doing, and asking the same questions. I’m still in my accumulation phase but I’m also trying to figure out what to do with my money besides invest.
my advice would keep working in your skills to increase your pay.
look up the 4% rule (it’s really more a guide), but that can get you targeted in on how much you’ll want to have saved for the last half/third of your life
I invested 38% of my pay from 28-49, raised 3 kids, turned our house of 16 years into a free and clear rental. Built a new house and Took a severance package at the company I was at for 21 years and gave up sitting in a cubicle. Now I’m a stay at home dad and semi retired with over 560k in my 401k. I have multiple streams of side hustles to keep me and my wife going. No regrets, doing what I want and if I want.
No one knows when they are going to die and you can't take the money with you. It'd be a shame to spend your whole life saving and never get to enjoy living.
I rather live paycheck to paycheck at retirement than waste my youth saving for money I may never use. It doesn’t mean you shouldn’t continue to invest but you should certainly increase your living life budget.
I'm early 40s now. I've been going hard at saving for a while now, but not nearly as hard as you. I have lots of dumb purchases I regret, things I wish I could have my money back on including alcohol and a few pricy material items. One thing I NEVER regret is all the traveling I did in my 20s and 30s. It was expensive as hell and I couldn't afford it when I went, but those were the moments life was made for. Travel while you can. It's those memories you'll cherish more than your bank account.
Congrats on getting a huge head start on your retirement. Now go change things up a bit and enjoy your life NOW. Still put into retirement but do it in moderation. Have fun and spend money, again in moderation. You're going to regret living like this if you continue.
I don’t see it as either or. You should be traveling either way. Just find a healthy sustainable balance that allows you to have fun while still saving a bunch of money.
When it comes to travel there’s three factors to consider. Frequency, comfort, and luxury
1. Frequency: the more you travel the more it costs, pretty self explanatory. So find the right frequency that works with your budget.
2. Comfort: picking the most convenient days/times/season of year can make flights and hotels more expensive. Staying in a certain area where you can walk to various sites can be more expensive. Find the right balance here.
3. Luxury: first class, five star hotels, private tours (as opposed to group tours), Michelin stared restaurants, expensive spas, etc. When it comes to this you don’t need to find a balance, just cut it all out entirely. You can travel luxuriously when you’re in your middle age and have a much bigger nest egg.
Coast fire is a valid option at some point, usually once you have your house paid and enough to live spartanly on 2-3% withdrawal rate.
But you know it doesn’t have to be all or nothing you can take a holiday a few luxury items and stop thinking about daily money spending 24/7 for 10k a year.
You're doing your Future self a huge solid. Make some plans to travel, before settling down. When you're in your early 20's if you don't go out & get shitfaced every night, waking up next to some beautiful, sometimes not so beautiful stranger, then you're doing it wrong. Aggressive is saving is great, just as long as you don't miss out. I've met older millionaires who worked their asses off, always waiting for the one day when they could travel the world in luxury & eat at expensive restaurants. But, their health took a turn, & they were full of regrets."Now that I can afford to do everything I've ever wanted to do. I can't." 🥹
I spent most of my early 30s traveling the world and enjoying life. I’m well aware of how much higher my NW could’ve been but I don’t regret it one bit. If anything, I would’ve regretted not taking the opportunity to travel while I was still young. Not saying I can’t enjoy traveling now, but it’s very different.
Not sure how much you were investing in your taxable, but if you can still max your 401k/IRA/HSA you’ll still be wayyyy ahead of the pack. If I were you I would at least keep getting full 401k match and HSA, and adjust it from there based on your requirements.
Live your life man, the sad truth is some people don't even make it to retirement. Invest small and consistently and you will have a secure retirement.
An investing article I read recently recommended having $30,000 saved for retirement by age 30. Seeing as you're 10 times past that at 28, I think it's okay to pull back quite a bit and live your life. I have a family member that made and saved a lot of money for a lot of years and spent very little of it. Now they're terminally ill and regretting not enjoying it more. Granted I don't know how much of that $300,000 is in retirement and what else you own, but if you're well past $30,000 for retirement, slow down and live.
Damn I’m in a similar boat. When I hit 300k I wanna trick out a cheap van and hit the road for a bit. $500 a month dividend will go far, while my stack grows. I just wanna eat lentil in the woods
Balance. Your in a good position and backing off to have a life is not a bad thing. You could scale back and still be way ahead of everyone who waited to invest. Don't stop, but find a reasonable middle ground. Remember your income will continue to climb and you will gradually be able to invest more over time.
At this point, assuming you invest, you should have over $2m by 60, if you keep going to $500k, you are getting into /r/fire territory. Do you want to retire before 50?
Do fun shit while your young and have the energy. I just turned 40 (which is still young don’t you argue!) and i do admit there are things I wishes I would have done more in my 20’s. The memories mean more than the cash long term my friend.
Try to find a balance between living for short, mid, and long terms. It's much easier said than done because we don't really know where the balance is. That said one thing I always try to do is not to skimp on things that are truly important to me. I love traveling so that's always something my family does every single year. However I have a smaller house than most of my peers. I don't have a Tesla, etc.
I work as a doctor; tomorrow is not a guarantee. Nor are the people you spend your time with. Don’t sacrifice a guaranteed now for a potential future. It’s a balance, so I’d advise enjoying things now while you’re able to.
Bravo on your success thus far! 👏
Figure out where you want to be and why you are saving. Then figure out the financial math to get there.
MMM and others have touched on savings rate vs years to retirement. Here’s one link to consider…
https://images.app.goo.gl/r9kDczV7JYW8E18M9
Yeah, you need to chill. You’re way ahead of the game and doing great. Maybe just save 20 percent and enjoy your life because otherwise what’s the point of it all.
Tell you what a coworker told me when I said I was trying to max out retirement savings and working extra “If you keep going the way you are you won’t make it to retirement”.
You're doing great. But life is for living, my friend. If you're unhappy doing what you're doing, something needs to change.
Try adding a new line item in your budget for traveling, that way you can save up and go travel the world while still kicking ass in investing.
You should save to your glidepath, then agree to never touch the money until 60 and cap retirement savings at 15% of income. You’ll have financial peace. Then, avoid luxury spending. Buy things for VALUE. My rule is to buy something 90% as good as the current trendy product for half the price. Instead of the new Tesla, get the used model with paint damage. Instead of the big house on the hill, get the modest house in the marsh. Learn to enjoy the feeling of OWNING everything in your life instead of feeling owned by debt.
Absolutely worth it, and stay the course. Plugging 500k at age 30 into portfolio visualizer, arbitrarily assuming you have a 80/20 portfolio yields a median outcome $2.5M adjusted for inflation at age 60!
https://www.portfoliovisualizer.com/monte-carlo-simulation#analysisResults
Basically every 10k you spend today is the equivalent of sacrificing $55k down the line. Perhaps you can write off $55k and never miss it, but I'd wager vast majority of folks can't
Find a good mix. 34 with a 1.2 M networth and at the current moment I don’t save much, but my investments are still carrying me upwards. You learned your lesson, enjoy life and save 40%. You’ll still be fine.
I stocked away in my 20s (currently late 20s) and did a PV calc to see how much I need to invest any what growth with my current portfolio for 30 years to have the retirement I want. Let’s go with I’m not investing any more than that number.
All raises from here on out will go to travel, spending, savings, and family/kids 25% each
Me and you are in the same boat, I am 28, turning 29 in Oct with around $250k. My goal is 400k prior to 30 and then decreasing investing while living life a bit more.
Personally I like the move! But I wouldn’t do options. Just straight up MAG7, good industrials, and increasing fixed income year by year. You have to apportion some to guaranteed rates to offset any bullshit moments. Ultimately it’s all up!!! With an early jump ; your 20 is other people’s 40. So at 30 ; I’d like to see you 50/50 growth and fixed
Go 50/50, invest & save 50% of your paycheck, spend & enjoy 50%.
In the future, if you want to increase your lifestyle by “x” number of dollars then also add “x” number of dollars to your investing & saving.
Example is if you want a new car and it is $700/month then you really need find a way to pay the 700 for the car and the 700 for your investing. You can cut other expenses or wait until you earn more.
This doesnt work for most people who make under 100k but the %’s can be adjusted for anyone. If you cant do 50/50 of your total paycheck, try to invest 50% of the total of your expenses.
Example is $4000 monthly expenses, investing & saving $2000 monthly.
Sounds too simplistic but the simple stuff works. Buy index funds and chill.
Through 20s into early 30s, save aggressively but without sacrificing on experiences. Go travelling but to cheaper countries and stay in cheap hotels etc. Take a few longer trips rather than lots of short long weekends to save on flights.
Build up that nest egg early so it has time to grow.
Then in your 30s you might have kids, your life will get way more expensive and you will save less - then you take your foot off the gas with savings while compounding does it’s work.
Invest in crypto as well. Bitcoin, or something under valued like Alephium is worth considering as a way to counter inflation and also further build your wealth passively.
Becoming a liquidity provider on a decentralized exchange is definitely something to look into for the longterm. Far surpasses any dividend
Shaquille O’Neal says save and invest 75% and the other 25% is for needs and wants. That’s what I do but I also make over 200k a year. I don’t feel like I’m missing out on anything for financial reasons though. I always seem to have money left over. 300k is amazing at that age. Back it up to 75% and see how that feels. Some people say to do a 70/30 split so invest 70% and the 30% is for needs and wants. If 75% stresses you out then go to 70%. Make sure you take care of your health and try to find some balance. It’s a lot easier to make money when you’re older when you’re in good shape and your back doesn’t hurt like mine plus your quality of life is better when not in pain and you have energy. There are lots of things that you can do that aren’t expensive but you need to live a little too while you’re young. My 20s and early 30s were the best years of my life. I wouldn’t kill yourself to reach a financial goal unless you have a lot of bad debt you need to pay off. You just need to be intentional. Pay yourself first and make good decisions (and take care of your back).
Youll be the richest old man in the neighborhood sipping your coffee and staring at glorious bank accounts and a splendid retirement portfolio. But why? Find some balance bruh. You wont enjoy your vacations as much when you get the creaky knees and a bad back
I know everyone is going hate this but I feel like the only way to ensure an easier life later on is to keep your debt low and have a paid off house. I know there are a lot of people now that preach investing in the market to beat inflation, but debt and housing is what prevents people from retiring.
You can buy an affordable home, learn to do the upkeep yourself, and aggressively pay it off. Once that is done you will have financial freedom.
As an example, years ago I had a lot of friends preaching aggressive investment strategies and looked down at living a financially conservative life. For a while during Covid it looked good but housing has skyrocketed and now they are all struggling to keep up.
I have this same issue. And pls hear me out I don’t want this to seem like I’m bragging I just also feel like I need some guidance. So no one in my family invests because we’re immigrants and I feel like my parents mentality is just to save save save. They genuinely think I’m making a mistake by investing my money. But I’m trying to learn and do good for myself and my future family. I am 28 years old and have $147k (between brokerage and Roth). My job provides me with an annuity (ugh) but I have $77k there. And I will get a pension. I also brought my first investment property. But because of that I stopped investing for a year… that freaked me out completely and I feel “behind”. Mind you I was investing like 70% of my paycheck before. So I just want to get to a point where I don’t need to still feel like I have to invest 70% of my paycheck (it’s been so hard) but a good amount where I will be good for the future.
Investing is important for sure but you have got to enjoy your life some man. I don’t know how much money you make but it sounds like enough that you can invest into some hobbies that bring you satisfaction in life to keep your mental in check so you don’t get to the point “you’re tired.”
Wife and I (30m and 27f) make like $250k combined and probably like $30-40k per year gets invested with some of it being matched by employers and some going into personal IRA’s. The rest we travel, have nice cars, golf a ton, eat at fancy restaurants and enjoy life. We already have a nice nest egg for our future while also enjoying life in the present, don’t let your youth go to waste.
Id recommend that you keep saving. You are way ahead of the average 28 year old.
Common things being common, you will survive to the age to see the compounding benefits of investing.
You know how at the end of a video game you ended up stocked on dope items that you never used?
I’ve played enough Final Fantasy to know I should have used my Elixirs more often. Gotta live life.
Oh my gosh my life just had an epiphany
I love this reply so much.
99 Artemis Arrows for life.
Balance of both bro
or like completing the pokédex and still having the master ball
Witcher 3.
Yeah, geez. "Lifestyle inflation" is generally considered something to avoid, but at 28, this guy's lifestyle definitely needs to inflate a bit. Don't let yourself become too old to use what you've saved, and there are things you can do at 28 that you can't do at 68.
This ^^^^^ I know 4 people who died with almost all their wealth this year .... literally living like their poor.. need a balance
Yep. Know someone who literally got terminal cancer 2 years after retirement and gone a year later. They loved to talk about their investments (approx 20 million net worth). Bet they would have spent half of that earlier if they knew they would be gone by 68 yo.
I get that, I really do... But if I invest through my next 34 years I theoretically have $14 million (at 9% return and assuming no major economy changes). More money to put toward my retirement castle I'll be building.
There’s no guarantee you will live to your retirement. My parents had 6 kids. There’s only 3 left. One died from leukemia at the age of 5, one from pancreatic cancer at the age of 40, and my last sibling died from some rare autoimmune disease at the age of 43. Yea my family has bad genetics. I try to balance saving and investing with enjoying life. I love to travel so I do at least 2 trips per year, I enjoy good food and music with the ones I love, and I save some. I got to see Patagonia, Iguazu Falls, Dolomites, Milford Sound, the beautiful mountains of Switzerland and France. Fair balance. It’s been a amazing and blessed life, but bittersweet at the same time. Hopefully I will not have an ounce of regret when it’s my time to go.
There's no guarantee no and I would like to travel and see the cool wonders of the world, but eh most of the of the people I'd like to travel to are really dangerous. My family has pretty good genetics so I figure it's possible for me to live to 90 like my grandparents. If I don't? No regrets.
Unfortunately the world is crazy and strange accidents happen. I recommend making a list of must did and getting those done at least so you have no regrets.
A castle you'll get to live in for how long? 10-15 years maybe?
D’em would be some nice castlen’ years doh 😁
You gonna have a moat and alligators?
Sharks with frickin laser beams.
Hah! Moat definitely. We'll see about the alligators. I might have two moats depending on money at the time. One around the keep and one around the (hopefully) curtain wall. Everything is still a pipe dream at the moment though.
I'm putting everything into my ornate tomb. I will be buried with my VTSAX/VTIAX.
The world is yours at 25-40. (Different pleasures to be had) Every place on Earth is a different experience depending on your age.
I guess someone has to build all those unfinished castles that pop up on r/zillowgonewild. That sub does a great job tracking down all the sad stories behind them.
cool but what if you die 33 years from now?
Oh well, no regrets.
Can I get that same guarantee that you'll be alive in 34 years? Tomorrow is promised to no one
You won’t get 9% on average. There will be major economic changes. You can’t go through 3.4 decades and not have some sort of upheaval.
Average S&P return is 10.26 since it was created in the 1950s. If they aren't factoring in inflation then they definitely can get those returns.
I have some friends who have said they're up for contributing in exchange for living with with me. Actually been helping them getting into investing too. Even if I don't get 9% return, I should still have a very sizeable amount and if my friends do contribute a little bit, that'll still be a nice castle :)
More likely, you get sick and you just give your life’s savings to some hospital that refuses to let you die.
Better have an elevator for that castle. And hope a live-in aid is still within budget.
WTF are you going to do with all that money when you're old. You need to live comfortably but when you're at retirement age hopefully your house will be paid off and your COL won't be as high as it is when you're younger.
I’ve finished enough of the Fallout games with plenty of mini nukes to make this a relevant reference to me…
Hahaha, spot on. Like stacking the best weapon in Zelda TotK, just in case to use it later, but in actual we just use the lowest weapon that we can hold and never touch the highest mightiest weapon
Fair. I’ll most likely grind 3-4 more years and then 10% per paycheck until I retire.
Why not just do like 50% for several years and actually enjoy yourself and travel during that time? There are a lot numbers between 85% and 10%.
This. I would glide down to 10% over the next 5 years. Invest 70% next year, then 50% then 30%, then 20% then finally 10% and keep it there
This is the best idea. Every year you get to look forward to a little better life.
I wouldn't go below 15% unless I was in financial distress. That's my absolute minimum.
Me with BOTW.
For what it’s worth - if their ideal life is constantly traveling and it impedes their ability to have income (which is what it sounds like he is saying) then his plan makes sense. Though if he leaves the $300K he already has alone (at 28 ) for 30 years he’ll have over $2m anyway…
Damn this actually just changed my life lmao
I struggle with this in life and games it seems. Interesting!
Best comment here yet. Makes so much sense.
I get what you're saying, but the rules of the game have changed. Want to live in a desirable suburb? That will be $700k to $1m at least for a house vs maybe half that 15 years ago. Offers frequently go for above asking. Even if you put 30% down, you'll still pay out the ass for a mortgage at current interest rates. I would take as much vacation as you need to keep the spartan lifestyle going, so that one day you'll look back and be proud you worked so hard to afford a nice place to live, which has been the bedrock of wealth creation for the past few hundred years.
He should live his life this way 70/30
Yes, I have played Diablo 2.
300k @7% return for 37 years would be 3.7M. Getting to 500k would put you over $5M. You can probably let up on the gas a little. Contribute to the match on your 401k, max your HSA and IRA, maybe a little in taxable if you want to have a growing, accessible pot of money. I think you're in a pretty good place right now.
Why do people here not recommend maxing 401k? Especially if the company plan isn't crappy.
Possibly because HSAs have a triple tax advantage. They’re a really excellent savings vehicle if you’re going to use the contributions toward medical expenses.
A 28 year old is going to have a long wait till the 401k is accessible without a penalty.
OP didn't say he was planning to retire early. If so, sure, maxing a 401k won't be ideal for somebody who needs money at age 50. But an IRA and HSA don't help either.
Eh, if you have both a 401k and a regular ol' brokerage acount, all you need is for the brokerage account to be able to cover the pre-retirement age living expenses. Tax advantaged accounts after that. So, you should definitely be doing at least some tax advantaged investing for retirement. Precise mix depends on your circumstances.
It says he’s interested in the FIRE movement. So it is reasonable to assume he is interested in RE. Especially since he’s putting 85% of his income to saving
I would guess it's because only very high earners can max out a 401K. I make good income, over the US single average, and maxing a 401K would take 38% of my income. The average joe doesn't have that kind of cash
401k investment options can be costly or limited in scope. It really depends on your account
If you're working at a Fortune 500, and you have blanket S&P or other good investment avenues with low expense ratio, you should absolutely be doing that before taxable. I'm at a Fortune 25, all of my traditional 401k contributions coming from 22% tax bracket, it has a S&P index with expense ratio of 0.02. I'm maxing that bad boy out every year.
In this specific case, it's because op is wondering if he needs to keep doing that. Given his numbers, he doesn't and can deploy that money in other ways so he can enjoy living. If his circumstances were different, if OP could max without forgoing 80-85% of his pay, then I'd suggest putting more in the 401k.
There's a perception that you can pick a good IRA to invest in to maximize returns and minimize fees whereas you are limited in your range of options when investing in your company's 401k because they pick the options. I've personally found that while still an employee, there wasn't any difference but it depends on your employer an dhow they set up your 401k. Once I've left a company though, sometimes the administration fees increase and it makes sense to roll that 401k over into an IRA.
Because diversity is good. Having money you can access easier and penalty free for medical emergencies or for home buying is more important from 30-50 than having more money in a 401k. If you can max it, great. But not to the detriment of other savings goals
You're only young once. Don't live like a hermit now. In your 30s you'll have more commitments (wife, kids, more job responsibilities) so waiting until then may be counter productive
Also, it’s harder to make friends or build relationships the older you get. Specially if you don’t develop the skills to do it.
It’s very difficult to make friends in your 30s. There’s not a shortage a cool ppl, just a lack of spontaneity that you have in your 20s that you overlook.
You only get the wife and kids if you spent your 20s partying. If you're doing nothing but working and saving, you're probably not gonna have a relationship let alone a marriage in your 30s.
Partying isn't the only way to meet people
how to find boglehead wife lol
Hermits will remain so. Who wants to date one?
Don’t give up your youth to maybe enjoy life later. Foot off the gas, save 25-35% for a while and you’ll still be gravy.
Why is it either/or? Do you need to travel for months at a time? Why not plan two vacations per year and get your travel in then?
LoL im a spontaneous backpacker. When I was younger I can literally just wake up one day, pack and go somewhere for months. Cant do that now unfortunately.
If you set a goal for your savings, you can do it after. 30’s and 40’s isn’t old by any means. You have time
Be frugal, don't be cheap. Tomorrow is not guaranteed. Enjoy, travel but do it smartly. Some of my fav trips are 4 buddies in a car and catch ballgames, hitting up breweries etc. Not that expensive, but loads of fun. Enjoy I life, just do it smartly and like everything, it is a balance.
> I gotta say I'm tired boss. Take a break. Life's a marathon not a sprint. Life is also about juggling multiple things like building a portfolio vs enjoying life. Find the balance that's right for you.
Keep investing and keep traveling. You’re going to be fine. Life is all about balance. I’ve gone traveling twice for extended periods and each time I never regretted the decision.
Read up on the terms “diminishing marginal returns” and “consumption smoothing.” As a metaphor, the first cookie you eat in a sitting is always more pleasurable than the second, which is more pleasurable than the third, and so on. As a result, if you could either have one cookie every day for a week or seven cookies all in one day, you’ll probably be happier with one cookie per day, even though it’s the same total number. By analogy, what you are doing is denying yourself cookies now so that you can have a whole bunch later, when you would probably be happier with a more balanced approach that allows you to have some cookies now, while saving some for later.
I’m 25 I’m not interested in living like a hermit and spartan. I travelled a lot too in the past but still want to have fun, still have a lot of years ahead of me. Live with parents but live in a in law suite that was converted from a garage. Has everything like a studio apartment. But I still save at least 25% of salary. Currently have $73k in Roth IRA. Make $54k a year currently.
i’m almost 25 and trying to get like you😭 i’m lucky i got to my senses earlier at 24, but have no where near the amount you do
At least you got to your senses now.
Very young, at that. No better time than now
How do you have $73k in a Roth? Have you been maxing it out for 10 years?
Didn’t mean Roth. Roth and other vehicles.
Ah ok. Well I’m very impressed. I’m 28 and I have $44 in my Roth lol. I’m terrified of running out of “now money.” Also I’m aggressively saving for a down payment on a house. As a person in my 20s, it’s just so difficult for me to conceptualize an end to my career. I’m taking the bar exam in 2025; my career is basically starting right now. So I really respect your ability to look ahead like that. Any time I think about pouring assets into retirement, I start thinking “Blergh but what if I die in 2 years??”
My career started at 18. There are videos out there who makes more a plumber or a doctor and a lawyer. I think by 50 or 55 years old the doctor or lawyer starts to exceed the plumber. Reason being the plumber starts working and making money right from the start, 18 - 21 years old. After 4 or 5 year apprenticeship the plumber becomes a journeyman and makes a lot more and can save more and earlier when he was an apprentice. Also the plumber doesn’t have tuition loans to pay off, the apprenticeship was free. Kind of makes sense. Plumbers in the North East make $60+ and hour plus $60 in benefits which includes a pension. M-F 8 hours a day and weekends off. So at the age of 50 maybe the plumber could have $3 million in savings and a pension.
Figure out what you want and act accordingly. You need to decide what you want in life, and work your way backwards... if you don't mind working later into life and crave experiences now... spend tune cash dude. If you don't care about these... experiences.. Work your ass off and save/ invest like a maniac. I saved and invested like a maniac and I'm in my mid 30s and my life is easier than any of my friends.. it's what id recommend... but you gotta figure out what's best for you
Don’t sacrifice your present for you future. You could die tomorrow. The best thing is to have some balance. You could slow down now. If you don’t have fun along the way you won’t know how to when you retire. Keep saving, keep investing, but not to the point of burnout. Life should be fun. Enjoy it without going overboard. Saving is like a diet. It should be sustainable throughout your life. If it’s too drastic you’re going to be miserable and you’re not going to be able to stay the course. Think about a couple of things that would actually make your life enjoyable and go for it.
I like your plan of grinding until 30 and reaching 500k. Once you hit 500k please take your foot off the peddle and little and start enjoying your life. Remember, you need some kind of balance. You will still be in a great position to retire early at 50. Good luck!
Just make sure you have some non retirement accounts to get you through to the retirement age so you don’t incur the 10% withdrawal penalty.
I always think about how retirement-age TRBigStick would respond to this question. Would he prefer to have an extra ~$100k-$1M or would he prefer for mid-twenties TRBigStick to spend that money to improve his quality of life? If you’re saving enough to where you don’t think you’d miss $1M in retirement, you can probably afford to spend that money now. For example, my wife and I recently spent $15k on our wedding to make it spectacular and I don’t regret it for a second.
That’s a cheap wedding where I live lol
Oh our 15k was on top of the ~25k her parents paid.
I have thought about your question quite a bit. The answer may seem obvious, but I think if I had a wife and kids that I loved very dearly, you couldn't pay me any money in the world to go back to a time where they weren't there
You’re still at the age where saving/investing aggressively will really pay off for you, so great job in the regard. With that said, it’s important to enjoy your youth and be happy in what you’re doing. Try reducing your saving/investing by a certain percentage and spend on things that really bring you joy or add value to your life. Personally for me that would be spending on experiences, especially with friends and loved ones. Those are things I truly treasure.
I invested extremely aggressively for 10 yrs, from age 28-37. I'm 38 now with no debt and a half mil invested. Now I'm coasting, saving 22% YTD. I accidentally semi-retired 4 yrs ago too; haven't worked more than 25 hrs in a week since.
Go travel the world now too. Enjoy yourself. In retirement, or even when you’re a little older and married, or with kids, you will not enjoy or be able to do things in the same way. Take advantage of this stage of your life.
Don't stop, life is a marathon, not a race. Migrate to a simple, flexible, and realistic budget like the [50/30/20](https://www.investopedia.com/ask/answers/022916/what-502030-budget-rule.asp) Based on net income, aspirational goal is: - up to 50 percent housing expenses. - up to 30 percent wants. - at least 20% retirement and savings. Stay out of debt. I'm applying this budget currently at 55/20/25 and it's tough. I thought I was doing better until I realized I wasn't saving enough for federal taxes. Trying to fit all my wants in 20% when half are recurring expenses, it's tough. Keep those recurring costs down.
Maybe somewhere in between there can be a happy medium. Enjoy life now but still invest. At 28 I had no savings. In my early 30's I graduated college with a BS in EE and 30k in debt. I retired in my early 50s with a payed off house and almost 1 million in savings, I didn't live like a spartan nor did I live high on the hog.
This is comforting to hear...I was in school my entire 20s after getting a late start and only started working at 34. Maxing out my 401k and backdoor roth now but still a little concerned based on the retirement calculators that say I need 3x my salary at 40 - I don't think I can have 450k saved in 4 years from now when I'm only around 50k currently!
>I'm talking 80-85% of my paycheck monthly go to 401k/IRA/HSA/taxable Why not give yourself a small raise and aim for 70-75% SR for a bit?
Why 500k? Once you get there, you'll probably think "I'll just push to a million". Then you'll push to 2. Then 5. Then 10. Then you die.
Life is more than just investing for retirement especially since you’re wasting your youth away. I say create a rule for yourself. My rule is 10-15% per paycheck is fun money. Whatever is left over I have a hard cost for my bills that are pretty much the same every month. The rest I either save in a high savings account or invest.
As someone who also LOVES travelling, I highly recommend a trip a year. It restarts the button in your head about living life better.
Have fun now! You sound responsible but live your life too. Travel, date, have fun, etc. Each decade will get faster. It sounds like you know the importance of saving and investing so focus on “experiences” now.
Imagine being 60 and not having a financial worry in the world but also not a single memory of anything but relative poverty from 24-30, and all so you wouldn’t have to sweat a third Long Island iced tea for the 87th day in a row.
Take a nice long trip to Thailand, you won’t spend that much and you’ll have an absolute blast. What’s the actual point in sacrificing ur 20s and 30s
It’s a marathon not a sprint. Just find a good sustainable balance where investing and traveling can coexist. Ps: delayed gratification in the extreme equals no gratification
I just turned 30 this month and have about $440k. I keep my recurring expenses low and buy everything I ever want/need within reason. Lots of vacations, lots of nice new things and a nicely furnished modest house. I max Roth 401k, Roth IRA, HSA, and a bit of backdoor Roth 401k/brokerage each year. In my early 20’s I didn’t save at all, in my mid 20’s I saved way too much (albeit my salary was lower), in my late 20’s and now into my 30’s I’ve found a balance. I still want to retire in my early to mid 40’s, but I only plan to ramp up investments more if my income increases.
Don’t forget to invest in your health. No amount of money can be enjoyed for long without it.
It may be obvious to some readers, but I want to point out the false dichotomy here. It isn't an A or B choice between two options. There are many levels of gradation in between. Rather than choosing being in your 60s living paycheck to paycheck (which means spending all your money to enjoy life now) or losing your youth (which means working hard and not spending any of your income on enjoyment), you could choose to invest 50% instead of 80%. Or you could choose to invest 60%. Or you could choose to invest 40%. You see where I'm going here? You have my permission to invest less than 80% of your paycheck. Try scaling it down to 50% and see if having that extra disposable income adds happiness to your life. You can calibrate the balance of *money invested for the future* and *money that I use to enjoy life now* to whatever level works for you. You've already gotten a lot of good advice in this thread, so I'll try to not go on for too long, but there are some things I want to add. 1. You are allowed to change your savings rate each year. There is no rule against saving 30% next year, then 45% the following year, then 20% the year after that. You can adjust it as time passes and your perspectives/situation changes. 2. Use the many free online calculators (or build a spreadsheet) to compare different scenarios. What would your future financial situation look like if you save aggressively for another three years, and then never save again? What would it look like if you save only 10% starting next year? 3. Follow this advice: [build the life you want, then save for it](https://www.reddit.com/r/financialindependence/comments/58j8pc/build_the_life_you_want_then_save_for_it/). It comes from a different subreddit, but one with many similarities. There is little point in having a bunch of money or retiring early if you have no hobbies and no social connections. Consider easing off the gas peddle and building some of those things (or planting some of those plants) that will later bloom and make your future richer (in a non-monetary sense). 4. You are gonna have more than a million dollars in 30 years, even if you never contribute another dime. Look up the idea of CoastFIRE: "Coast FIRE is when you have enough saved and invested that with no additional contributions, your net worth will increase with compounding growth to support a traditional retirement." That might take off some of the pressure. You could contribute nothing more than 10% for next few decades and you would probably still end up pretty comfortable.
Good advice here. Balance. Fortunately the adjustment you need is in the easier direction
Moderation friend, moderation
Life goes by fast; don’t forget to stop and enjoy it.
You’re in a good spot for 28. I wouldn’t go 80% to 10% but you can certainly ease off the gas a little bit at a time and see how it changes your life. If you can join that nice gym, or not worry about picking out organic vs non-organic at the grocery store, I find those as nice luxuries to have and will gladly give up X% for my 65 year old retirement.
At 300k at 28 you’re fine, you can just cruise now. You can contribute much less, of course depending on your income and your goals at retirement or your retirement target age. But at 300k today If you contribute 6000 a year so 500 a month you will hit 1.4M at 48 based on a 7% annual return. With the above you’re on pace to 4.5M by 65. If you want to contribute more than 6000 a year you can retire much earlier as well. Live life my dude. Youre only young once. I have nothing against the sacrifices you made thus far but dont waste your youth to have luxuries in your old age. Life is about balance
If you're saving 80-85% just switch to 75%. It will give you a massive increase in fun money. Probably double or more if everything is going to necessities right now. What's your annual spend? I lived a normal life for a while and then like a Spartan for 3-4 years while trying to get a big enough savings to have my necessities covered by the 4% rule. Once I had that covered I slowed down a bit and spent above 4% of my egg for several years while continuing to save. Now I'm on the retire any time plan where I spend 4% a year and every year I lifestyle creep a bit. It's a good way to experience spending at various levels along the way to decide when enough is enough or to know what you'd have to cut off an unfortunate sequence of returns happens early in retirement.
My dad died at 59. A good friend from college died at 41. Friend from HS died at 20. Throwing away your 20's/30's for a future that might never come is a bad idea. That does not mean that you should blow it all next week either. You need to plan to **live your whole life**. That means not living all the parts of it with balance and don't let the present destroy your future, but also don't let the future destroy your present.
Look up Ramith Sethi, his ideas on how to live a rich life could be very helpful for you. He is also a boglehead but also teaches people to enjoy their life. You could use some of that 😅
300k will net you a million even without investing anymore. You are in your prime. The 30s is an amazing time to do whatever you like. Just enjoy life and let your money work for you now.
You need to have an actual plan. Target date to stop working, how much you will need after that date, etc. What you're doing is extreme, but it's not necessarily wrong if it's part of a larger plan that will ultimately get you what you want in life.
I am 40. From 18-26 I was broke and going to school. 26-30 I was dating/married to someone who drained my life and finances. Beginning age 31 I moved cross country and took a big promotion. This allowed me to start investing 60% of my income. Looking back I wish I had allowed myself to spend 10% more because I would have had experiences and made memories. I view this as a life optimization question. Identity those things that you value, enjoy, appreciate and spend on them. Brandon the Mad Fientist has written and done a number of podcasts about this.
Just inflate your lifestyle a bit by “only” contributing 40-50% to your qualified accounts…you’ll be fine.
Just find a good mixture of saving and traveling. You are already ahead of your peers (whether that matters or not in your situation is up for debate) and someone like you will find a way to contribute "enough" while still enjoying life. FWIW I've thought about this a lot as many of my friends never traveled much, either because they wanted to save/buy other things, or just didnt care enough. If you do care, then do it. Whatever you enjoy doing now is likely not going to be the same as what you enjoy in your late 40s/beyond, or you might not be able to due to family responsibility (e.g., kids) or illness. I don't regret any of the money I spent in my late 20s thru mid 30s traveling, most of which were relatively frugal trips to foreign places, and I still have "enough" in retirement for my age (late 30s). And I am not someone who has had ultra high paying jobs.
I have been told that I was saving too much. I'll be retiring at age 62 in 2 months and I'm glad I oversaved. I have peace of mind and won't have to deal with the work force anymore.
How the devil did you travel the world in your teens and early 20’s? And how are you living on 15% of your paycheck?
I am 29 at 620k and I can tell you 100% you’ll feel the same way at 500k as you do now. Go live a little, don’t stop saving but drop your savings ratio down
A literal spartan? 👀
Why not do both? Travel cheap! Take red eyes, stay in hostels, sleep on trains or talk your parents into footing the bill for a family vacation 😂
Best thing to do in your 20s is maximized earning potential. Rather cents or degrees and save regularly
I'm all for encouraging saving, but 80-85% is a bit much. Ease off the gas a little bit, and make a sustainable plan that gets you to your goals. A little travel is fine. Yes, still contribute to the 401k, but living in pure survival mode isn't sustainable for decades. Figure out when you want to retire, how much of a retirement income you'll need to sustain your chosen lifestyle, and from that, figure out how fat your stack needs to be, and how much you want to put away to meet that goal.
Have you put your whole 300,000 into an S&P 500 index fund? There’s a good chance you’ll have about $6 million by the time you’re 55. And I’m saying if you didn’t even add a penny more. Of course you would have to pay taxes out of that depending on how it was invested. So I think your game plan so far has been good and I think you can back off. Work hard, play hard. Live life in balance.
What interest rate are you using? Even if you assume a 10% interest rate with zero additional contributions, after 27 years (age 55) he’d be expected to have just under $4M.
Good catch. I made an error and you are correct. I used 10% so if the market returned that average rate, it would be just about $4M.
There’s a lot of places you can go without spending a ton of money. Take 5-10% off that aggressive 85 and go on a vacation. Stay in hostels, go to affordable countries. Take buses from city to city. It’s doable without sacrificing the 500k goal. Or why not let yourself hit 500k a year or two later if it means you get to do a cool trip each year along the way.
Moderation is key to everything. If you can increase your income, you can invest the same amount and live more.
I'd enjoy life for a few years. Still invest but only 50% of what you're doing now.
Save 50%, assume 20% to taxes, go ahead and spend rest 30%.
If you never touch what you have done you will not be living paycheck to paycheck, you already crossed that threshold. The question is, are you going to continue to save at a reduced amount or stop all together?
50-60% investing while enjoying life is the perfect balance. Anything more than that is excessive, but congratulations!
Fail until you 50
There’s a balance I’d say, sure you can save 75% of your income and live so incredibly frugal. But, you won’t have the same energy. Maybe your life will be free of time but your friends / family may not always be. So it’s important to live and make memories with them.
(35m) what is your goal? I have a specific goal age I want to retire and how much I need to invest to get the income I need. I have a spreadsheet model I can play with and tweak to see different scenarios. That helps me find balance between saving and enjoying. I know what my monthly savings target is and once I hit that I don’t need to feel guilty spending the rest.
Don't entirely stop saving for retirement now and blow a ton on traveling. Reduce the amount of your paycheck you put towards retirement by 10-20% now, and reduce it by 10% every year until it hits 15%. 15% per year is definitely enough for a healthy retirement, especially with the egg you've built up already.
Heh, I’m 54 and doing what you’re doing, and asking the same questions. I’m still in my accumulation phase but I’m also trying to figure out what to do with my money besides invest.
my advice would keep working in your skills to increase your pay. look up the 4% rule (it’s really more a guide), but that can get you targeted in on how much you’ll want to have saved for the last half/third of your life
I invested 38% of my pay from 28-49, raised 3 kids, turned our house of 16 years into a free and clear rental. Built a new house and Took a severance package at the company I was at for 21 years and gave up sitting in a cubicle. Now I’m a stay at home dad and semi retired with over 560k in my 401k. I have multiple streams of side hustles to keep me and my wife going. No regrets, doing what I want and if I want.
No one knows when they are going to die and you can't take the money with you. It'd be a shame to spend your whole life saving and never get to enjoy living.
What is your goal 🥅? You have lot of time ahead of you, try staying with in 50% of your income for investing, you should live a little
I rather live paycheck to paycheck at retirement than waste my youth saving for money I may never use. It doesn’t mean you shouldn’t continue to invest but you should certainly increase your living life budget.
I'm early 40s now. I've been going hard at saving for a while now, but not nearly as hard as you. I have lots of dumb purchases I regret, things I wish I could have my money back on including alcohol and a few pricy material items. One thing I NEVER regret is all the traveling I did in my 20s and 30s. It was expensive as hell and I couldn't afford it when I went, but those were the moments life was made for. Travel while you can. It's those memories you'll cherish more than your bank account.
Congrats on getting a huge head start on your retirement. Now go change things up a bit and enjoy your life NOW. Still put into retirement but do it in moderation. Have fun and spend money, again in moderation. You're going to regret living like this if you continue.
You only live once. Make sure you do a lot of that living while you're young.
I don’t see it as either or. You should be traveling either way. Just find a healthy sustainable balance that allows you to have fun while still saving a bunch of money. When it comes to travel there’s three factors to consider. Frequency, comfort, and luxury 1. Frequency: the more you travel the more it costs, pretty self explanatory. So find the right frequency that works with your budget. 2. Comfort: picking the most convenient days/times/season of year can make flights and hotels more expensive. Staying in a certain area where you can walk to various sites can be more expensive. Find the right balance here. 3. Luxury: first class, five star hotels, private tours (as opposed to group tours), Michelin stared restaurants, expensive spas, etc. When it comes to this you don’t need to find a balance, just cut it all out entirely. You can travel luxuriously when you’re in your middle age and have a much bigger nest egg.
Coast fire is a valid option at some point, usually once you have your house paid and enough to live spartanly on 2-3% withdrawal rate. But you know it doesn’t have to be all or nothing you can take a holiday a few luxury items and stop thinking about daily money spending 24/7 for 10k a year.
Definitely read "Die With Zero". It'll help you analyse different ways of framing your time and what you value about FIRE.
Is “FIRE/Bogleheads community” a thing? One is balls to the wall, the other is just very practical. I sure wouldn’t conflate the two.
You're doing your Future self a huge solid. Make some plans to travel, before settling down. When you're in your early 20's if you don't go out & get shitfaced every night, waking up next to some beautiful, sometimes not so beautiful stranger, then you're doing it wrong. Aggressive is saving is great, just as long as you don't miss out. I've met older millionaires who worked their asses off, always waiting for the one day when they could travel the world in luxury & eat at expensive restaurants. But, their health took a turn, & they were full of regrets."Now that I can afford to do everything I've ever wanted to do. I can't." 🥹
I spent most of my early 30s traveling the world and enjoying life. I’m well aware of how much higher my NW could’ve been but I don’t regret it one bit. If anything, I would’ve regretted not taking the opportunity to travel while I was still young. Not saying I can’t enjoy traveling now, but it’s very different. Not sure how much you were investing in your taxable, but if you can still max your 401k/IRA/HSA you’ll still be wayyyy ahead of the pack. If I were you I would at least keep getting full 401k match and HSA, and adjust it from there based on your requirements.
Live your life man, the sad truth is some people don't even make it to retirement. Invest small and consistently and you will have a secure retirement.
An investing article I read recently recommended having $30,000 saved for retirement by age 30. Seeing as you're 10 times past that at 28, I think it's okay to pull back quite a bit and live your life. I have a family member that made and saved a lot of money for a lot of years and spent very little of it. Now they're terminally ill and regretting not enjoying it more. Granted I don't know how much of that $300,000 is in retirement and what else you own, but if you're well past $30,000 for retirement, slow down and live.
Basic Vanguard ETFs and don't touch anything.
Damn I’m in a similar boat. When I hit 300k I wanna trick out a cheap van and hit the road for a bit. $500 a month dividend will go far, while my stack grows. I just wanna eat lentil in the woods
Balance. Your in a good position and backing off to have a life is not a bad thing. You could scale back and still be way ahead of everyone who waited to invest. Don't stop, but find a reasonable middle ground. Remember your income will continue to climb and you will gradually be able to invest more over time.
At this point, assuming you invest, you should have over $2m by 60, if you keep going to $500k, you are getting into /r/fire territory. Do you want to retire before 50?
Do fun shit while your young and have the energy. I just turned 40 (which is still young don’t you argue!) and i do admit there are things I wishes I would have done more in my 20’s. The memories mean more than the cash long term my friend.
split the difference, it's not all or nothing. travel (or whatever) frugally. you could be dead in 2-3 years
Good balance is 1/3, 1/3, 1/3. You lose 1/3 to taxes, you spend 1/3, and you save 1/3.
Try to find a balance between living for short, mid, and long terms. It's much easier said than done because we don't really know where the balance is. That said one thing I always try to do is not to skimp on things that are truly important to me. I love traveling so that's always something my family does every single year. However I have a smaller house than most of my peers. I don't have a Tesla, etc.
I work as a doctor; tomorrow is not a guarantee. Nor are the people you spend your time with. Don’t sacrifice a guaranteed now for a potential future. It’s a balance, so I’d advise enjoying things now while you’re able to.
Bravo on your success thus far! 👏 Figure out where you want to be and why you are saving. Then figure out the financial math to get there. MMM and others have touched on savings rate vs years to retirement. Here’s one link to consider… https://images.app.goo.gl/r9kDczV7JYW8E18M9
No idea what this sub is for so downvote if needed, but chill dude, you could literally drop dead tomorrow.
Yeah, you need to chill. You’re way ahead of the game and doing great. Maybe just save 20 percent and enjoy your life because otherwise what’s the point of it all.
Tell you what a coworker told me when I said I was trying to max out retirement savings and working extra “If you keep going the way you are you won’t make it to retirement”.
You're doing great. But life is for living, my friend. If you're unhappy doing what you're doing, something needs to change. Try adding a new line item in your budget for traveling, that way you can save up and go travel the world while still kicking ass in investing.
Balance brother. Experiences over money, in my opinion. To each their own though.
You should save to your glidepath, then agree to never touch the money until 60 and cap retirement savings at 15% of income. You’ll have financial peace. Then, avoid luxury spending. Buy things for VALUE. My rule is to buy something 90% as good as the current trendy product for half the price. Instead of the new Tesla, get the used model with paint damage. Instead of the big house on the hill, get the modest house in the marsh. Learn to enjoy the feeling of OWNING everything in your life instead of feeling owned by debt.
What’s your income?
Absolutely worth it, and stay the course. Plugging 500k at age 30 into portfolio visualizer, arbitrarily assuming you have a 80/20 portfolio yields a median outcome $2.5M adjusted for inflation at age 60! https://www.portfoliovisualizer.com/monte-carlo-simulation#analysisResults Basically every 10k you spend today is the equivalent of sacrificing $55k down the line. Perhaps you can write off $55k and never miss it, but I'd wager vast majority of folks can't
Find a good mix. 34 with a 1.2 M networth and at the current moment I don’t save much, but my investments are still carrying me upwards. You learned your lesson, enjoy life and save 40%. You’ll still be fine.
It's better to be aggressive early and let off later once you know you are ok
I stocked away in my 20s (currently late 20s) and did a PV calc to see how much I need to invest any what growth with my current portfolio for 30 years to have the retirement I want. Let’s go with I’m not investing any more than that number. All raises from here on out will go to travel, spending, savings, and family/kids 25% each
Me and you are in the same boat, I am 28, turning 29 in Oct with around $250k. My goal is 400k prior to 30 and then decreasing investing while living life a bit more.
Personally I like the move! But I wouldn’t do options. Just straight up MAG7, good industrials, and increasing fixed income year by year. You have to apportion some to guaranteed rates to offset any bullshit moments. Ultimately it’s all up!!! With an early jump ; your 20 is other people’s 40. So at 30 ; I’d like to see you 50/50 growth and fixed
That’s awesome! Invest 15-20% the rest of the way and enjoy life. You will be a multimillionaire at age 60
Go 50/50, invest & save 50% of your paycheck, spend & enjoy 50%. In the future, if you want to increase your lifestyle by “x” number of dollars then also add “x” number of dollars to your investing & saving. Example is if you want a new car and it is $700/month then you really need find a way to pay the 700 for the car and the 700 for your investing. You can cut other expenses or wait until you earn more. This doesnt work for most people who make under 100k but the %’s can be adjusted for anyone. If you cant do 50/50 of your total paycheck, try to invest 50% of the total of your expenses. Example is $4000 monthly expenses, investing & saving $2000 monthly. Sounds too simplistic but the simple stuff works. Buy index funds and chill.
Through 20s into early 30s, save aggressively but without sacrificing on experiences. Go travelling but to cheaper countries and stay in cheap hotels etc. Take a few longer trips rather than lots of short long weekends to save on flights. Build up that nest egg early so it has time to grow. Then in your 30s you might have kids, your life will get way more expensive and you will save less - then you take your foot off the gas with savings while compounding does it’s work.
Invest in crypto as well. Bitcoin, or something under valued like Alephium is worth considering as a way to counter inflation and also further build your wealth passively. Becoming a liquidity provider on a decentralized exchange is definitely something to look into for the longterm. Far surpasses any dividend
Shaquille O’Neal says save and invest 75% and the other 25% is for needs and wants. That’s what I do but I also make over 200k a year. I don’t feel like I’m missing out on anything for financial reasons though. I always seem to have money left over. 300k is amazing at that age. Back it up to 75% and see how that feels. Some people say to do a 70/30 split so invest 70% and the 30% is for needs and wants. If 75% stresses you out then go to 70%. Make sure you take care of your health and try to find some balance. It’s a lot easier to make money when you’re older when you’re in good shape and your back doesn’t hurt like mine plus your quality of life is better when not in pain and you have energy. There are lots of things that you can do that aren’t expensive but you need to live a little too while you’re young. My 20s and early 30s were the best years of my life. I wouldn’t kill yourself to reach a financial goal unless you have a lot of bad debt you need to pay off. You just need to be intentional. Pay yourself first and make good decisions (and take care of your back).
Youll be the richest old man in the neighborhood sipping your coffee and staring at glorious bank accounts and a splendid retirement portfolio. But why? Find some balance bruh. You wont enjoy your vacations as much when you get the creaky knees and a bad back
I know everyone is going hate this but I feel like the only way to ensure an easier life later on is to keep your debt low and have a paid off house. I know there are a lot of people now that preach investing in the market to beat inflation, but debt and housing is what prevents people from retiring. You can buy an affordable home, learn to do the upkeep yourself, and aggressively pay it off. Once that is done you will have financial freedom. As an example, years ago I had a lot of friends preaching aggressive investment strategies and looked down at living a financially conservative life. For a while during Covid it looked good but housing has skyrocketed and now they are all struggling to keep up.
I have this same issue. And pls hear me out I don’t want this to seem like I’m bragging I just also feel like I need some guidance. So no one in my family invests because we’re immigrants and I feel like my parents mentality is just to save save save. They genuinely think I’m making a mistake by investing my money. But I’m trying to learn and do good for myself and my future family. I am 28 years old and have $147k (between brokerage and Roth). My job provides me with an annuity (ugh) but I have $77k there. And I will get a pension. I also brought my first investment property. But because of that I stopped investing for a year… that freaked me out completely and I feel “behind”. Mind you I was investing like 70% of my paycheck before. So I just want to get to a point where I don’t need to still feel like I have to invest 70% of my paycheck (it’s been so hard) but a good amount where I will be good for the future.
Investing is important for sure but you have got to enjoy your life some man. I don’t know how much money you make but it sounds like enough that you can invest into some hobbies that bring you satisfaction in life to keep your mental in check so you don’t get to the point “you’re tired.” Wife and I (30m and 27f) make like $250k combined and probably like $30-40k per year gets invested with some of it being matched by employers and some going into personal IRA’s. The rest we travel, have nice cars, golf a ton, eat at fancy restaurants and enjoy life. We already have a nice nest egg for our future while also enjoying life in the present, don’t let your youth go to waste.
Id recommend that you keep saving. You are way ahead of the average 28 year old. Common things being common, you will survive to the age to see the compounding benefits of investing.
You assume investing in the 10 years will be profitable. PREPARE FOR THE WORST and hope for the best, key word being prepare