I make good money, yet am worse off than I should be... Help me get back on track (please)!

x_mythrowaway_x · 1 month

So right now it looks like you're spending near $3k/month to pay down debt? (Between "debt repayment", car loan, student loan). Considering that number doesn't include your mortgage, that's a lot. To be blunt, this is probably why you feel poor.

The good news, is you're taking the right steps to get things back into check. And it sounds like you're have some of the more serious, higher interest debt, paid off in the next 8-9 months.

Once that debt is eliminated, you'll start to see your cash flow improve. At that point, do not upgrade your lifestyle. Build up your nest egg & savings. Make sure you max out your tax-deferred retirement options (e.g., a Roth IRA & your 401k). At this point you should be able to, and it sounds like you might have some lost time to make up for.

And as someone getting married in a few months, I can tell you, even if the bride's parents are paying, there's still a lot of costs you'll end up picking up. Brace for that.

The really big question is the house. You say you owe $156k, but you didn't give an estimate of its current worth?

Tzeentch99 · 1 month

I posted a bit ago to personal finance. I evaluate my fiances quarterly, so turns out just a few days ago. I'm currently worth $1.1M. In my mid-thirties.

I didn't come from money -- quite the opposite. Only one parent graduated high school. The other fell into drugs & alcohol. Abusive (physically & verbally). Parents divorced when I was ~10. Four kids. We qualified for food stamps & occasionally the power would be turned off at home because the light bill hadn't been paid.

My mom, however, did see education as extremely important. We could get away with just about everything (a single mom of four can't supervise that much), but if you fucked around with your grades, you would find yourself the target of her unholy wrath.

Because we had squat, I got what I thought was good financing for college. Meaning some grants, but also a lot of loans. I was happy camper when I got rid of those.

Over the course of years, I learned a lot of lessons about money. Here's what I wrote in the other thread:

Avoid debt. Especially credit card debt. I took a long time to learn this one. Credit cards are fine if you can pay the balance off (in fact, can be a good way to earn miles), but if you can't afford it without using a credit card, you can't afford it. Period.
Live below your means. Obvious, but the less you spend, the more you can spend. This seems obvious, but many friends who have seen their incomes rise, have also escalated their lifestyles.
Save automatically. Have your savings automatically transfered from your checking account to a savings account. For me, seeing a large balance at the ATM makes me less careful with money, so I try to keep it to what I think I can spend.
Look at ways to get "free" money. Passing on free money sounds crazy, but that's what I tell friends they're doing if they aren't investing in their 401k, especially when there's an employer match to be had.
Be mindful of taxes! Invest in your Roth IRA & 401k early! When I was in my young 20s, it hurt to contribute to them, but thanks to compound interest, I'm glad I did. Avoid trying to out smart the market. (Something else I had to learn) I generally don't own an individual funds. A low cost index fund is your friend. I can't brag to friends about buying a stock low & selling high, but who cares? I invest to have more money, not stories. Read "A Random Walk Down Wall Street" and you're set.
Discuss your compensation openly with a close set of friends, especially if they work in similar fields. These are people you want to see do well, not really compete with. Your attitude should be whenever anyone in group does well, that's great (not jealousy). It can be a big help. You'll feel more confident asking for larger comp. (either in a new job or a raise) if you know others are getting.
Learn to negotiate. This was also really hard for me. I hate negotiating, especially when it came to things like job offers. But I had a choice: Decide I didn't want to do it & accept I would get paid less, or suck it up & try to get paid more. I'm glad I started to do the latter. This is also where the group of friends above can help. Being in the middle of negotiation is hard. Have people with your best interest at heart, but nothing for them immediately at stake, really helps with objectively, thinking things through, etc.

Two books I wish someone had pointed me at earlier: A Random Walk Down Wall Street and The Bogleheads' Guide to Investing.

throwaway_perfin · 1 month

Wait until the job offer. It's really hard to find/hire people. Once they've decided they want you, you'll have the best leverage you're going to get.

Also: let them be the first to put a number on the table. Quite possibly could be higher than you expect.

throwaway_perfin · 1 month

It's actually simple enough I can describe it:

Each row is an account. (E.g. "Bank - Checking", "Bank - Saving", etc.)
Each column is a quarter
after the last account, I sum up the column

throwaway_perfin · 4 months

Not yet, but somewhat likely in the next 2-3 years.

Zurevu · 4 months

Ad hominem arguments aside, I'm not sure you actually read the thread. I didn't come from money. My parents didn't have anything & don't know anything about it either. My first 1.5% job (as you called it) was for 30k. Half of my net worth I'd estimate to be from before I was at six figues.

You'd also be sad to find that many people who make 100k aren't going to have a million dollars after 15 years. Managing money isn't easy, or all together obvious. It's not impossible, but you have to learn it. That's what this subreddit is about. Read the thread (here or others) and you'll see that what it's about.

There are good people out here who can't get a job, but that's not what this thread is about. I do feel bad for them & well like to help them, but again, this isn't intended to be a thread to be all things to all people.

I do feel bad for you, however. You're very angry & looking for others to blame your life failures on. What you'll find is that it's because of your unwillingness to take responsibility for your own life. You spit out names & attack at people without listening, which can't make you a pleasant person to work with. For some reason, you choose to attack women (where the hell did that come from?), so I assume you're alone too.

I only hope you learn why you're failure, before it's too late to correct it.

You also seem to like to have the last word, so I'll let you respond to this whatever you like. I won't even read it, as I'm sure you'll dedicated a lot of it to name calling (again).

All my best.

throwaway_perfin · 4 months

For someone who doesn't come from money, I really wish I had come across the boglehead material earlier. I learned a lot of the same lessons the hard way, but it's nice to be able to point people at it.

throwaway_perfin · 4 months

Agreed. Even where I am, I'm worried about being able to pay for my kids college one day.

Zurevu · 4 months

What do you think personal finance is for? I'm sorry, but if you think getting to $1M is easy, even at 100k/year, you're just wrong. A lot of people who don't come from money, don't know how to start managing it wisely. It takes time to learn. If you want to close your eyes & pretend it's all magic, that's your choice.

Zurevu · 4 months

Again, look into a collection of low cost, tax free bonds. You should be able to get several percent.

throwaway_perfin · 4 months

Awesome! When you hit a goal, post something here so we can celebrate with you!

throwaway_perfin · 4 months

Being able to provide for my (future) family, send my kids to college & take care of my mom. If I can retire early or start a second career, that'd be icing on the cake.

throwaway_perfin · 4 months

For the past few years, I've always contributed such that I hit the max. (This year 17,500)

throwaway_perfin · 4 months

Best of luck!

throwaway_perfin · 4 months

To answer your first question, the answer is "I don't know better." :)

As I've aged, I've considered shifting more to bonds & re-balancing on an annual basis. It sounds like you know a fair bit. Any advice?

throwaway_perfin · 4 months

Exactly what I did. Hello my Apple brother!

Zurevu · 4 months

You're right, Kyle. As you demonstrate in each of your many posts in this thread, you know everything & you're doomed to fail.

I wish you luck anyway.

throwaway_perfin · 4 months

I feel you. A lot of us have been there too. It can be hard, but best of luck. FWIW, we're all cheering for you. Consider posting a "I'm free of debt!" story here once you're there, so we can celebrate with you.

throwaway_perfin · 4 months

I'm not 100% as I didn't actively monitor it. In my mid-20s I was turned down at Ikea for a credit card (that was embarrassing), so I would guess "no" at that time. These days, I'm in good shape. (I was house shopping in 2006 & checked it then, although thankfully I didn't end up buying anything.)

throwaway_perfin · 4 months

I feel bad for your situation, but what did you come to /r/personalfinance hoping to find?

throwaway_perfin · 4 months

Thanks & best of luck to you! I look forward to reading your $1M post down the road. :)

Zurevu · 4 months

Excellent point. Sad but true. :-/

throwaway_perfin · 4 months

Assest allocation is the single most important element of any portfolio. Well done, sir.

throwaway_perfin · 4 months

Is it this one, the Principal LifeTime 2050 Fund?

https://www.principalfunds.com/InvestmentProfiles/index.faces?symbol=PPEAX&retail=true&pf=true

I'm not an advisor, but it has a low Moringstar rating & higher costs. If you're limited to Principal, have you considered their LargeCap S&P 500 fund? Expenses are half of the other.

If you can ditch them, I'd switch to Vanguard's S&P index (even lower costs).

throwaway_perfin · 4 months

I think that's great! You're right -- the goal is happiness, not money.

Reddit's a hard place to communicate your entire life. I don't have kids yet, but I do have someone special I plan to spend my life with and (God-willing) a family.

I've made sacrifices, but with few exceptions, most of them I was glad to have done so in hindsight. It's like skipping sweets & fast food, so you can enjoy the occasional really good dinner.

throwaway_perfin

TROPHY CASE

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