If you’re over 35, I’m sorry – you’re too late for these! – but if you’re under 35 then HURRY UP AND MAKE THESE HAPPEN OR DIE IN FINANCIAL RUIN!!
Just kidding, haha… I just love how dire these lists always seem, don’t you? ;) As if everything always hinged on age and age alone? There are some pretty good ones on this list though, so let’s compare how we’re doing just in case our life really did depend on it one day…
Big ups to @DJStickyWicket for passing me this, and to Business Insider who posted it: 7 money goals to hit by the time you’re 35 that are actually achievable
Here are the 7 goals:
(I’m playing along, but at 38 I’m cheating 😱)
- Have a growing net worth — Check. Doesn’t grow every month, but it’s definitely been trending upwards over the years… $58,769.65 in 2008 and $843,567.22 now! I’d gladly trade it all to be back in my 20s again though, haha… (so long as I can keep my brain)
- Be paid your value — I think so? I got paid more when I was hustling more, and now I get paid less as I hustle less – so seems about fair. Always hard to complain when you write a diary for a living ;)
- Be able to float yourself for three to six months — Yep! I think we’d be good for about a year or so until all our savings would be drained… Not optimal, but definitely good to know there’s padding there if the $hit ever hit the fan. Aghhh! Another phrase I’m glad never comes true! Haha…
- Be dedicating at least 20% of your income to short and long-term goals — Yep. Haven’t calculated the exact % lately, but between IRA maxings and TSP and all other cash we hoard, we should definitely be over 20%. The real challenge is getting it up to 40% or even 50%! You see that video of Shaq that was making the rounds the other day? He recommends banking at least half too ;)
- Have a network of trusted financial sources — Oh yeah! All we got around us are financial sources here!! Gotta love the blogging community! Pair that with my trusty accountant, and well, a guy’s got everything he needs in his financial life… Actually that’s not completely accurate, see my answer to #7 below first, haha…
- Start taking insurance more seriously — No doubt. In fact, I’m wondering if we have too much insurance? We got insurance for our cars, insurance for our health, insurance for our personal property, insurance for our lives, and we even have insurance that comes in the form of an umbrella! I’ve been tempted over the years to just bank all the premiums and go the self-insured route (an idea that pops up in the blogosphere every now and then, mainly from ex-pats), but I know the day I do that will be the day I need it the most, haha… Curious if any of you out there do this, though?
- Consider a very basic estate plan – especially if you have children — I’m going to put down a FAIL here. I technically *started* one and I do *consider* it almost every single day (it’s on my wife’s top 3 things to check off this summer after baby #3, and I am failing her!), but for the life of me I just can’t pull the trigger. Nor can I find someone I like and trust yet to walk us through it and answer my million and one questions, haha… (any lawyers out there want the job?? ;)). As someone who enjoys hanging out in cemeteries for fun you’d think this would be right up my alley, but for some reason it really isn’t. And it needs to change as it’s the last remaining hole in our finances!
So, 6 out of 7 for this 38 year old… Pretty good up until that last part?
How do you compare? More wins than fails? Wanna share your results and age? ;)
All good things to think about for sure, but not the end all be all of life. If you happened to have your epiphany early on in your age then count your blessings, but it’s not the end of the world if you didn’t catch on until later either. It may be harder to catch up and reach your goals, but it’s 100% do-able whether you’re 35, 45, or even 65! What counts is you’re here now and working on it.
So no giving up, y’all… Keep kicking ass and taking names dollars!
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Hi J$!
Well I’m 25, and by this measure I think I’m doing pretty well for a 35 year old!
1. Have a growing net worth – check!
2. Be paid your value – I think I am currently, and am about to move to work with fewer hours for much better pay, so double check
3. Be able to float yourself for three to six months – My emergency fund would cover “normal” spending levels for four months, six if I retained my mostly passive lodger income, and longer if I went into “emergency” (hermit) spending mode. Check
4. Be dedicating at least 20% of your income to short and long-term goals – paying into public sector pension (with employer contributions) pre-tax, then investing 30% of my net pay in index funds, plus cash savings. Check
5. Have a network of trusted financial sources – mostly online community & resources, finances aren’t complicated or large enough to warrant an accountant yet.
6. Start taking insurance more seriously – Home, car, income, professional. Check
7. Consider a very basic estate plan – Fail. But with no dependents yet, not high on my priority list.
Six out of seven? On par with J$ himself! ;)
TFE
I would say you’re doing much better than J$ himself for only being 25 ;) J$ was out handing his money to whichever store – or bar – asked for it at that age! He didn’t catch on for another 3 years!
As a 37 year old with 3 kids I can’t help but shake my head at your lack of a plan for your children in the worst case scenario.
We save as much as we can, max out our 401ks, pump money into 529s but also recognize everything could come crashing down in the event of an injury illness or death. Before our first son was born we took our disability policies, life insurance and finalized our will. (Of course we had to buy some more life insurance when we found out we were having twins – but since I was 30 pounds lighter my premium for $2m of coverage wasn’t that different that my prior premium for $1m).
Either way, thanks for sharing and keep up the good work.
It’s true – I currently suck at the long-term planning stage… I do have my beneficiaries all set up with all my accounts, but it’s definitely needing a will/estate plan to tie it all together properly!
Interesting list and you know you can count on me playing along :)
So turning 34 this year, my stats are worse than yours:
1. Check, slowly but steadily.
2. Checkish, kind of, compared to current situation I am, compared to the possibilities I am not
3. Checkish, most of the times its true, currently not, but have backup plans
4. Checkish… aggressively paying back home loan counts I assume
5. Check, the most definite one ;)
6. Checkish, realized errors and having plans to everything before the end of the year
7. Fail, no clue on this, waiting for your enlightening post after the lawyer pops up :)
My only advantage is that I have a year to fill up the holes and make those “Checkish” point a definitive “HellYeah” :)
I’m 32 so I have a couple years to round this out.
1. Check: Doubled in the last 3 years
2. Check, Been working on this for years, finally where I want to be. working half the year and able to save close to half my money.
3. Check, 6 months+ we’ve been there for several years. I can’t describe how freeing it feels to know that I could have any number of emergencies happen and still be OK. It took several years to build and was frustrating as heck but totally worth it.
4. Check, right around 40%
5. Check. PF bloggers and my parents.
6. Partial: We are good on health, home, car, and life insurance. I feel the need to get an Umbrella, but then I have to increase coverage on cars and homes and total will cost around $400 a year it looks.
7. Partial: We have a Will, designated beneficiaries for all accounts, and I have a multi page letter to my wife of a financial plan for after I pass. What I don’t have is a concrete plan for building generation wealth. I’ve written a couple blog posts on it and have revised my plan here and there but it isn’t solidified yet and I also haven’t involved my parents in the discussion.
All good stuff! Excellent goals for people in their 30s to shoot for!
You’re only working 1/2 time AND able to save 1/2 of that income?? Where do we sign up for that job? Haha…
It took about 10 years of building my career to get there…sorry no get rich quick scheme. Working refueling outages at nuclear power plants and taking on leadership roles. I guess it was slightly misleading to say I work half time, I work half the year, but the hours ends up being not far off from an average worker because I’m working around 72 hour weeks when I am working. I work primarily in the Fall and Spring with Summers and Winters off.
Still very very fascinating stuff man, way to create your ideal lifestyle like that :)
J – just do it. It’s super awkward considering who to put in charge if you are incapacitated or gone, I understand.
But it is a gift to your loved ones to have the estate plan. My grandparents had one, and it meant funeral decisions did not have to be made when my mom & aunt were grieving. My dad and step mom showed me theirs, and then dad unexpectedly ended up in the hospital and it was reassuring to know, things had been discussed and decided in advance.
After dad surprising us like that, I finally got mine done. Especially for setting up who will make medical decisions if you or your wife can’t, and who will be in charge of your finances so that if you can’t, the bills are still getting paid. Dad is fine now, but had some memory issues while in the hospital. If for any reason my step mom had been too distraught to take care of the every day stuff, the estate plan has back ups listed.
And these aren’t forever decisions. Reevaluate in the future if it feels overwhelming now to decide for the long term. It’s much easier to update, and tweak every few years.
P.s. I can check them all off!
Yeah, I think that’s what I need to keep in mind for sure – the fact it’s not permanent and will be adjusted over time… A part of it is also knowing we’re moving out of state next year and not sure how that would affect it all too (don’t want to do it all over again!) so I kinda just want to wait until then, but who knows what life has in store for us (or how long my wife will go until she lays down the law, haha…)
Regarding moving, a good professional will know the ropes for that. My will cost $5 to file with the county. The will itself cost more, but once you have it, updates or filing it somewhere new isn’t that pricey.
Don’t use moving as an excuse to procrastinate.
Love the analogy that Shaq uses! Debt makes his analogy somewhat difficult, especially for professionals around my age (mid 20’s) who have to allocate money towards their debt, but the concept of simply never seeing half your money because you automatically put it into savings is BRILLIANT! It is always much easier for people to save when they never see the money in the first place!
Way to go SHAQ!
7 out of 7 and I’m 35 (turning 36 later this year). Good to know I got all the bases covered.
Have to say, estate planning/will took us the longest. Thought about having one when our oldest was born and didn’t get it typed up and notarized until our oldest was almost 4.
Hey – nice to see you here, man! Things good? You coming out to FinCon again this year? :)
Unfortunately, not this year. Orlando is a bit too far to go from Vancouver. Hopefully next year so we can hang out and I can be the fanboy around you. ;) :p
Ok…first off SURELY there are older peeps reading this blog… BUT that being said “almost 44” married 24 years & 3 almost adult kids…b/c wanted kids early we don’t have nearly all that’s checked except the insurances…. I know I know..WE WERE stupid(yea I know not nice word but we were not smart in early 20’s/pretty much most 30’s) & playing catch-up NOW DOES suck.. we don’t have an employer matching retirements accounts..plus bad debt don’t get to put into as much as I/we like.. seriously the ONLY checkmark we are 100% covered is insurance on ALL home/life/vehicle have maybe 3months savings set up if we are careful… do have trusted advisors folks & accountant thru folks to “help” when needed…that’s pretty much all I can check off..for NOW but I’m/we are working on it..
That last part is key there – you’re now working on it!! And you’re right – there are all ages reading this blog right now – i just got a note from someone in their 60s the other day just beginning their financial journey. If only we all had our epiphanies early on in life!
I am 40 and I have achieved 6 out of 7. So which one did I missed? It’s #7. I know that I should get going and at least do something about it, I just have no motivation at all. Maybe thinking about my death really turns me off? I may have to find a huge carrot to lure myself to head in that direction.
almost 50 — with grandchild
1. Check
2. Check
3. Check
4. Check
5. Check
6. Check
7. Check – it was grandchild that finally hit this one. Every 401K/SPP savings type plan asks you for your beneficiaries, so for most of your savings, you have an ability to bypass probate and just get them to the next bookkeeper. However, the tangibles do not have that capability. Find a lawyer you trust? Hit up the daycare parents around you. If you don’t have anything special (like a need for certain types of trusts — and with minor children – you DO! Who are you leaving your kids to?) Contact the local bar, find someone who specializes in estates and TRUSTS!
Interview them. this is a partnership.
Have they written trusts for minors?
Have they done guardianships?
How will they handle special bequests?
How long have they done this?
How have they stayed up to date with changing laws?
If you need to change your will in five years, will addenda work, or a whole new rewrite?
Are there special beneficiary rules for SEPs over 401Ks over ROTH?
How much of your assets need to be spelled out?
I have a special trust written in for an adult child of mine who will probably never be able to budget for himself, with trustees I know will do what’s best for him, and will be around as long as he is.
Frankly, the biggest thing to get you going on this will… Who decides who gets your kids if both of you get “hit by a fish truck” tomorrow? If you have no will, there is no guarantee they will go with family (and BTW, WHICH family?).
Ugh I know – all the questions that are so hard to answer!!
We did discuss and come to a conclusion on some of these already though – when we started a will a few years back. We know who will take care of them and I even know where I want to be buried, but it’s all half-written up and not official at all so I guess it doesn’t really matter much at the moment :(
WOOHOOO! We made it! I always dread these checklists because there are def some goals we haven’t hit yet, but on this list… we’re good ;)
I just turned 30, and have all except the estate plan. With no wife or kids, my estate plan would probably involve a large donation to someone who named a small building or something after me. Name the buffet line after me at the university.
I’m 34 and I have more fails than wins. I have a lot of work to do.
Jason, you’ve got time. You’ll get there. It’s amazing how fast some of this can move simply by us paying attention. SEriously, look at J. Money’s ten year increase in savings – that’s insane but I’ve heard him say many times that half the battle was just deciding to pay attention. It really works.
Very very true! In fact, there’s really only one main thing that I’ve done year in and year out that’s made up a bulk of our wealth: maxing out our retirement accounts every year. If you literally just did that and nothing else you will be more than fine (although of course much easier to say than do certain years/all years!)
You’re right Ryan. Thanks.
37 this year. Let’s see:
1. Check – although looking at your 10 year growth is hella inspiration! Wow!
2. Paid My Value – ….Sure. I have big dreams of blogging for a living like you but yes, I can not complain at all about my day job, super good pay and crazy good benefits!
3. Float myself for 3 to 6 months – that is a big Hell-No. BUT if both of us were not working the I suppose we’d let the nanny go which would free up money and I would assume it wouldn’t be a triple hit and the rental property would still be making money so ………maybe. MAYBE. But not straight up, no. Gotta work on that.
4. 20% to Savings – Almost 17% between 401k; Pension; and 529 plan. Sooo close! but not cigar!
5. Network – does you and Mr. Money Mustache count? haha, I also have an accountant but no wealth management person but I get so much from the financial bloggers, seriously
6. I’m with you – I’m all insuranced up. Too much maybe.
7. Big FAT NOT. My kid is 16 months old and still no will. Bad mommy, Bad! :)
Don’t put off estate planning, not only is it important, it’s actually a lot of fun! You get to set in place a plan that will take all the hard work you and your wife did saving and becoming financially independent and set your kids (and future generations/charities/etc.. depending on the estate size) for life!! There are so many options available, just do some research and sit with both an advisor and an attorney (hopefully who have worked together before) who know all the benefits and have experience putting together financial game plans…. whether or not you need a trust, get someone who has done those too as they should have a broader knowledge base (and how great would it be to need a trust one day!! That’s one of my goals!). Even for those of us without families, estate planning gives us the chance to set financial goals that last longer than we do :)
“You get to set in place a plan that will take all the hard work you and your wife did saving and becoming financially independent and set your kids ” — Never thought of it that way, I like it :) It would certainly help if I already knew someone who did this stuff and I trusted (probably would have already been done by now!), but guess it’s time for me to start owning up and researching until i can *find* that someone… Got some recommendations so far from reader of this post, so hopefully we find our person!
Ah yes, # 7 “Consider a very basic estate plan”. Insurance is one leg for sure, but equally important are powers of attorney for property and for personal care, and equally important but sadly ignored by many, a QUALITY will. I say a quality will because you are not going to get one of them from a will kit. My wife is an estate lawyer. Beyond dealing with intestacy, my wife often has to mop up messes created by lawyers who do no specialize in estate work. There is a real difference, especially in terms of counselling and knowing what questions to ask.
That begs the question: how do you find a quality estate lawyer? I’d start by asking for a referral from a quality accountant. If you don’t have one of those, ask the wealthiest people you know for referrals. If that doesn’t work, then choose a large law firm as the standards of practice tend to be higher there (my wife does work at a small firm, but it has a boutique practice and are well regarded so do not fear a small firm – just make sure it is well vetted). Finally, you may be dealing with hundreds of thousands of dollars, or perhaps millions. Do not be scared to spend a few bucks here: if you pay peanuts you may get monkeys.
You should also revise your will when needed to deal with changes in your life situation (ie. birth of children – who will be their guardian in the event of your death, divorce, sudden wealth etc), and REVIEW your will at least annually to make sure it meets your requirements. You needn’t meet with a lawyer annually, but don’t be scared to spend some money if your life circumstances warrant it.
I’m 58 and have a mid 7 figure net worth. My experience has been that when people cheap out on getting quality legal and accounting advice that bad things follow. This advice is especially true to those of us who are entrepreneurs (as opposed to employees), and particularly if we have partners in our endeavours.
Oh man, I’m shaking my head yes to all of this even though it now freaks me out even more finding *the right* one to work with! But really appreciate all of these tips/thoughts – thank you. Getting less scary talking about all this in the open, but still aways from being *excited* to deal with it, haha…
enemy of good. This applies to the law as much as anything else in life, and the law KNOWS this. Until you get it all together to pay a qualified professional to draft something excellent up for you, don’t let the fact that things are imperfect stop you from putting your wishes down in (hand) writing! If you get hit by the proverbial bus tomorrow, at least leave handwritten detailed notes about your WISHES for the distribution of your assets and for the care of your minor children, so that those you leave behind have something to go by. Something, while not ideal, is way better than nothing every day of the week. And the law recognizes this reality–that folks die unexpectedly/imperfectly every damned day. (From someone who also doesn’t have it all together and should but just can’t for some reason (for now).)
I needed this – yes!! thank you!!! time for both of us to get the damn thing done! :)
I checked everything off but number 7, just like you. We’ve *started* a plan, but when you’re fairly young you seem to not really think about it (it’s like we believe we’re invincible or something). However, I now know I need to get on with it already and make one. Thanks for bringing it back up.
Wow, we’re the same age! Cool! My list almost looks identical, though I keep the minimal insurance I need. As a single person there’s nothing I would need life insurance for. My parents could sell the house, my only debt, and can easily afford the mortage payments until then.
This led me to think back to when I was 35 — this is when I reached facepunch enlightenment and drastically changed my spending and start setting long-term goals. Of course I wish I had done this at 25, but I also think it’s crazy when I think how far I’ve come in only three years.
At 35 I was a few months from paying off my remaining student loan debt (I only borrowed for two years worth since I was an adult student; the rest paid via a combo of out of pocket and grants) and living in my last shitty apartment (and dating a 22 year old, a lesson hard-learned). I had just started my current job and moved back to my hometown. Now I own a house on a 15-year mortgage that costs as much as rent at that shitty apartment did (and I don’t have to sleep in the kitchen to avoid my noisy upstairs neighbor anymore!), saving around 40 percent (working on increasing this) and have developed some growing side hustles. My last pay increase did not result in my spending increasing, so if I keep up with this trend, FI should not be terribly far away!
Niiiiiice!!! Helluva turn around indeed, my friend!
Thanks J Money! I’m not at your level yet but I’m working on it!
We’re about the same. Estate planning always gets put off until later. :)
I’ll put it on my goal list next year.
At 38, looks like I’m good for all except #7… but with no kids and a wife who gets it all by default, I’m not too worried about it!
#2 is an interesting question. I have a music degree and very little career ambition, and so I get paid more than I think I’m worth, so yes? If my wife were onboard (HAH!) I could stop working and her income/health insurance would suffice for our needs — between our retirement contributions, HSA contributions, and a savings account, we’re more or less putting away my salary right now. If we decide in the next year or two to have a kid (especially if she keeps getting surprisingly large raises) that may well end up how it works out. It’s a nice place to be.
Haha – definitely sounds so :)
Let’s see…I’m 38…and 2018 has been a year that has ran roughshod over me. But here we go:
1. Have a growing net worth – check!
2. Be paid your value – for the area of the country I live in…yes. Compared to if I was willing to move, no.
3. Be able to float yourself for three to six months – Check, but I would definitely have to reign in my family’s spending and sort of become a budget ninja and I would spend the whole time in panic mode…just sort of my nature.
4. Be dedicating at least 20% of your income to short and long-term goals – Check, with our 401k’s, Roth IRAs, and savings…we are at least at 20%…we could do better though.
5. Have a network of trusted financial sources – As of 2018, check. I have a financial adviser, a CPA, and (wait for it…) an estate lawyer! More in # 7…
6. Start taking insurance more seriously – Check…I’ve always been one to watch insurance and keep tabs on it. We’ve got home, auto, and life.
7. Consider a very basic estate plan – Check. 2018 has seen my husband have a stroke at 42 and my mother pass away at 75 all in January. Hence why I have the estate lawyer, the CPA, and the financial adviser. I had a lot to sort out and they helped me immensely. The stroke was the kick in the pants I needed to get our estate plan down in writing. I nearly lost my entire support system in my life in the span of a week. Estate planning is important. Don’t wait.
AHHHHH FREAKY!!!! I’m so glad your husband has pulled through from it! Man…. definitely tough :(
Remember the guy that lied to his wife about their debt and it took your post and comments of like 50 people to get him to clear the air? Well this post and our 50 comments are for you to take care of this today. Just knock it out, doesn’t take very much time or money and if you kick it tomorrow (hopefully not) then your kids have help (and perhaps more importantly your surviving relatives know what you would have wanted). peace out
Haha touche.
Hey COOL!!! :DDD
At 23 I think am on a good track for most of these! I definitely have more work on building more income streams and raising my net worth but by 35 I think I will be in good standings. I definitely need to take insurance more seriously and I need to read up more about getting the best deals and so on. Also, I don’t have an estate plan yet ( I don’t have any children so I think I have some time) but it’s something I need to look into. Great post J.
Living wills are difficult because of changing family dynamics for better of for worse that people really don’t want to fathom.
It’s really touchy and uncomfortable so I can see how you’ve put it off.
You can update it thru out your life and that could add to complication.
Some people just put one together when they have some terminal illness.
Exactly!! So many moving parts!
But at the same time I def. don’t want to wait until/if something bad happens so we’ll def. be tackling it sooner than later, just been putting it off and don’t think I can anymore.
Hi J,
I’m 31 and have 5/7 down. The two I’m short in are estate planning and saving 20% of my income toward retirement. I don’t have children and am single, so kinda been putting estate planning off. As for retirement, I’m lucky to have a mandatory retirement plan matched by my employer (I’m a teacher) that will pay me a monthly amount until I die if I choose that route (I’ll also be able to choose a lump sum). I also have a 403(b) account and investments, but it’s not 20% of my income. May need to up my game in those areas.
7 of 7! But I’m still working on our long term care insurance and entertaining doubts about whether it makes sense. I think the premise of the insurance is very important but I want to be able to have more confidence that it’ll actually be around when the time comes for us to need it. That’s the one area I’m considering self insuring.
You want a primer on the things you need to decide so that you can get yourself prepared for that estate planning session? I can drop you a link if you want!
Yes please! I think I’ve gotten the gist of it from bits and pieces, but need as much help as i can get haha… Also curious about how it works when you move states and whether it sticks or you have to re-do/etc, do you know? Probably something the lawyers could answer on the spot if I JUST CALL THEM!! (Which I will, now that I’ve put it out to the world! Haha…)
I think. you an handwrite a will an it’s considered valid. Do some research. But you might want to do that in the interim. If you have no will now the state will decided how to divide your assets, I believe.
I hit 6 out of 7 and I’m 40. Working on 7 out of 7. Not too bad.
J –
What about having at least 3 sources of income by 35? Any thoughts to that my man?
-Lanny
I think *any* extra sources of income can do wonders to your wealth, especially if you can pull it off by 35!
Chapter 2 of “The Wealthy Barber” is a nice little section of estate planning
The book I just gave away! D’oh, haha…
I have only reached #1, 4, and 6 but I have a few more years to go. Luckily my parents bought life insurance for us when we were kids so I never had to worry about that. They are smart asian parents who know the best for their kids :P
#2-Not sure if I’m getting paid my value but since I’m a student, I’m content when my pay, although it’s much lower than market.
#3-I used to be able to do this when I had a job but since I don’t, I can’t really float myself for 3-6 months. I would have to sell some major assets to do that.
#5-Technically I’m my own trusty accountant, does that count?
#7-Estate planning scares me, but I will probably get around to it eventually. Maybe after I get married and have kids!
I hope that everyone under 35 pays attention to this! When I was 35, my husband and I had only 2 of the 7: We were well paid and we had insurance. We soon were to face his under/unemployment period of 6 years. So 1 in 7! And is was miserable. Can’t emphasize that enough. Now, with a late turn-around (so glad it really doesn’t have to be done before 35 – even though it’s FAR better to do it that way), we’ve got all 7 checked off – and then some :)
And have been inspiring people ever since!!! Myself included!
Rob and I need to update our will, but we don’t have an appointment for another several weeks. But last week, we visited our family, and explained who will be the guardians for the kids, how a trust works, and all the stuff we’re changing.
We get through everything, and my little brother said, “So everyone agrees that I get the money?” Of course, he was joking, but it made me think that getting the will done is pretty important.
Haha agreed :)
Ahh, #6 and #7….. but I’m only 30, so I guess I have a few more years to get my shit together there ;)
with no will, the beneficiaries are decided per stirpes:your parents, sibs and your kids. 3 kids and 3 sibs divides the estate in fourths with the 3 kids getting a third of their fourth if i remember correctly
I think it depends by state?
First time commenter, long time reader. My wife and I will be 33 this year and we have a 3yr old daughter. We both work regular jobs with no current side-hustles. Here goes nothing.
1. Check. We’ve doubled our net worth over the last 4 years to nearly $500K today. Biggest impact has been due to return on retirement investments and equity in our home (increased value, decreased mortgage).
2. Check. We both are earning on the higher-end of the pay scale for our current positions, when compared to others in the same area with similar experience. Double that with a really low cost of living, and we’re doing pretty well. My wife often suggests she should stay at home, which isn’t happening anytime soon.
3. Check. A little more conservative here. Could probably float out to 9mos comfortably.
4. Check. Currently at 30% (excluding HSA and additional monthly principal payments on our house) for retirement and 12% for short term savings goals (home repairs, used car, taxes, vacations, etc.)
5. Check. I’m a CPA by trade and I have a trusted financial advisor. I have many other relationships with advisors through my work and various not-for-profit boards which I serve on.
6. Check. Same as J$ – I’m wondering if we have too much also. Hoping we never have to use it. Goal is to be self-insured by age 45.
7. Check. Financial advisor has been hinting at this for a few years now, after the birth of our daughter. We finally checked it off our list earlier this year. For $1K we were able to setup a living trust and pour-over wills. Other than changing beneficiary’s and re-titling assets, the process was very painless.
Killing it! Good time to leave your first comment here, haha….
Next time chime in with something you suck at so it helps even out :)
I’m 3ish out of 7. Hmmmm…gotta hustle before I turn 35!
I’m 43….and around 6 out of 7.
1 – check (definitely doing better at this now than when I was 35)
2 – check (at least I believe so)
3 – check (probably over 12 months emergency fund)
4 – check (a little over 20% but nowhere near 40%)
5 – partially (have this blog for great resources but no accountant)
6 – check (probably too much life insurance, especially since I don’t have any kids or spouse at the moment)
7 – partially (have a will but had it written when I lived in another state. Plus one of my beneficiaries passed away last year. Ironically, this was more in place when I was 35 than now! I also have my plot so consider that a check too. Unfortunately I unexpectedly lost my 21 year old cousin back in 2006 – motivated me to get my plot and get a will in place. I’ve been saying I need to update my will but still haven’t gotten to it yet. Maybe this post will be the kick in the pants I need to do it!)
I hope so!!! We’ll be doing it together because I’m now making it a top priority myself! Y’all kicked my ass into gear! Haha…
I’m boring, 7 for 7. Took forever to knock the estate plan off the list, but a health scare caused us to get our act together and finalize it last October
That usually does the trick :(
I turn 36 tomorrow. 6/7 for me… I don’t have kids but for around 7-8 years my partner and I have talked about writing a will etc and never have.
You’re making me feel better about the will stuff, haha….
I just started making phone calls to some referrals on Friday and feels pretty good getting it started and off my brain a bit… fwiw.
J, prepare to hear some blasphemy from someone who works in insurance…insurance (and it’s evil cousin the lottery) are basically a tax on people that are bad at math. It’s all numbers and data, and trust me, advanced algorithms are better at math than most people.
I’m sure there are plenty of people that have needed it, but let’s just go back to the basic premise. Pretend you didn’t know what insurance was. I come up to you and say give me $20, if something happens, I’ll give you $5 back. You ask well what if nothing happens? I say I’ll keep the $20. But don’t worry I’ll come back next month and we can do this again. How quickly would you tell me to beat it haha. As Chris Rock used to joke, they should call insurance ‘in case shit’, and if shit don’t happen, gimme my damn money back!
It’s absurd. It’s the like the inverse of the lottery. How do you sell it? Fear. Fear of losing your stuff. It can be a strong motivator. And when fear isn’t enough, it’s never a bad business plan to have mandates in place forcing people to be consumers.
I’m surprised with all the DIY, financial responsibility, and it’s not about the stuff ideas that we share that insurance doesn’t get more flak in the personal finance community. I’m not saying it has no purpose whatsoever, but it’s definitely one of those sacred cows that should be questioned a little more.
I think it would made a good discussion topic in more depth sometime, as well as exploring what other ‘taxes on people who struggle with math’ are lurking out there :)
Haha… I agree we’re def. more pro than not :) Although the FIRE community *is* starting to talk about self-insuring more as you head into financial freedom which is opening up my eyes more. Lemme ask you though – if you don’t believe in/like insurance, how come you work in it? Doesn’t it feel weird?
Insurance is not who I am, it’s just what I do for money. And while I clearly wouldn’t describe it as my dream job, it does allow me to pursue and accomplish my dreams. I’m not sure if that makes me the textbook definition of a sellout? If so, I’m just going to have to live with that for a few more years haha. It was my first ‘real job’ out of college and the only company I have worked for over the past 15 years. As far as corporations go, we do a lot of good things and help a lot of people but as with most public companies we exist to make money for our shareholders. If I sound conflicted, these are the thoughts that brought me to the pursuit of FIRE.
Besides, I’m more of a Stoic in nature, so going Jerry Maguire isn’t going to change much.
Props for asking me a thoughtful and thought provoking follow-up question. Even though I don’t comment often, your blog is one of my favorites because of that type of interaction with your readers.
And thank you for answering so openly and honestly! That’s pretty good considering the nature of my follow up, haha… Glad you’re enjoying the blog, man – thx for taking the time to say so and chime in here :)
Hey love the list! At 31 I got 6 of the 7! Estate plan FAIL too. haha
I’m 37. New to the whole FI concept but Im so hooked. I’d been thinking of it independently and when I found so many like minded financial engineers I was so relieved. Best of all I had reached FI without even knowing it.
I have a check on everything except for 6 and 7.
5. I think the FI blogging community is just awesome.
6. I think of insurance as a necessary (mandatory) evil :) have only what’s legally needed.
7. Like most here, I’ve failed this one.
Well that’s a nice surprise to have when you sit down to run the numbers! Haha… most people do *not* find they have hit freedom their first time paying attention ;) Nice to e-meet you.
I am coming at this from an older perspective as I am 63 – but for all of those older folks – it is never too late. I was 49 before I could really afford – or let’s be honest – paid enough attention to this whole financial thing – to get started.
I really started getting it together when I started actually tracking my every penny (yes I was and am still occassionally that nit-picky). It was amazing to find out how much I was “letting float away through my fingers”.
First thing I did was automate savings – it was really hard to do at first -but after a short while, you really do adapt. Premise is, if I don’t see it, I don’t spend it – lol
As far as this challenge goes, I am at 6.5 out of 7. I have an estate plan but now that my children are finally really out on their own – but now have grandchildren, I have to update my estate plan.
my Networth in 2004 when I started was $65,544.07 and it is now $780,485.26.
so – my 2 biggest contributions to this discussion are that
1) it is never too late (or too old) to start!
2) even a couple dollars saved is more than you had before
As far as Umbrella policies – check it out. By taking out an Umbrella plan with my insurance company, I was able to actually decrease some of the auto and homeowners expenses. It is ends up that I am paying less for more and better coverage.
Way to go Toya – love this!!! Helluva turnaround over there! Amazing the potential we all have when we apply ourselves, eh? Thanks for taking the time to share :)
Long-time silent reader here…
Hello, J Money and everyone.
I always read your blog with a great interest, because, yeah, the budget is sexy and it is pretty interesting to see how your (USA) financial system works.
I find your financial system more logical, stable and predictable, than ours. I was born in USSR, now live in Ukraine and our financial system, let’s face a truth, is a $hit.
When USSR broke down, our people lost ALL their savings and stability. When the initial shock subsided, people started to save money from zero point again.
No one trusted banks, because they existed for a couple of years only, and then they suddenly disappeared in the night taking peoples’ savings with them.
So, people saved their money in cash at their homes and protected them (big and angry dogs, thick metal doors, high security locks, etc.).
Most savings were in a national money, because it was pretty hard to buy American $.
At those halcyon times (1996) $1 costed around 2 grivnas (Ukranian money).
In 2008, $1 costed 8 grivnas (financial crisis).
In 2014, $1 costed 33 grivnas (financial crisis and war with Russia).
Today, $1 costs 27 grivnas.
Loss after loss…
By the time we are 40, my husband and I both have an Uni degree and PhD, good jobs (I’m a medical doctor and he is a history scientist) and NO debts. We live in a big city and have a son.
We bought our own apartment when we were 35 (paid off in cash). This year we bought an apartment (paid off in cash) for our son (he is 13 now).
Also, we save money (10% of general income) for our son’s future Uni education. We want him to start his adult life having his own home, proper education and no debts. It is up to him how to live his own life further, but we did everything we could to help him to stay on his own two feet.
Although we’ll get a guaranteed pension in the future, we save money for our retirement also (20% of a general income). Who knows how our country is going to surprise us.
We live 20 mins ride from our works, so we never had a car. We use the public transport and, sometimes, taxi (emergent cases).
Our lifestyle is pretty minimalistic, but we have everything we need.
We always contemplate and discuss every purchase and we have a principle – “we are not so wealthy to buy cheap things”. We buy 1 thing that has a high quality and a long lifespan, instead of 2-3 cheap things of the same kind. At the end of the day, 2-3 cheap things cost more in general, than 1 high quality thing.
If we both lose our jobs, we have a safety pad for 1 year of normal life or 2 years of “cheap” life. Plus, we always can sell my jewelry to have an additional 1-2 years of relatively good life.
We don’t have such an estate plan as you guys have, but if we die suddenly, our son would inherit everything (according to our laws).
That’s how life goes on the other side of the globe. Thank you for attention :)
AHHH So fascinating!!! I have to save this for when we do our next “around the world” post!
https://budgetsaresexy.com/personal-finance-around-the-world/
Thank you for sharing all of this – it is so interesting to read :) And also scary in parts, ugh… We have it SO EASY here in the States, and yet so many people still complain and feel they are owed more/etc/etc.. We’d have the biggest shock of our lives going through what hundreds of other countries have gone through over the centuries… And who knows what’s lurking for us too in the future with how politics and such are shaping up.
But on a more positive note – way to be so financially ahead there and even with your son too :) Buying homes with cash is no joke! Haha… (And now I want to see all your jewelry too that’s worth so much, haha…)
Thanks for no being silent anymore!
Thank you for your reply, J Money.
Yeah, life is never boring here. It is always something “new” every day and, often, it isn’t pleasant at all. But, we have a very positive mindset and our life is too short to waste it on negative thoughts. So, no way :)
“Buying homes with cash is no joke!”.
Truth. Sometimes, it looks like a gangsters’ deal. Everyone is suspicious. Everyone is tense. Everyone is ready to fight. And the poor dear notary guy, who is scared to death for being forced to seal a deal between a hammer and an anvil. Such an adrenaline rush to all participants…
But, life goes on and that’s good. No complains :)
Hahahhaa…
I hope you continue to not be silent here – you’re slowly becoming my new favorite person :)
Lol. Thank you, J Money.
I’m more about listening and reading, than talking. Exactly as my nickname implies. But, maybe, I’ll drop a couple of lines in the future. We’ll see :)
Anyway, no matter what, I wish you and your family good health and grand success. You have it all already, by the way, but enough is never enough, eh? :)
I’m pretty happy with my enough :)
“I’m pretty happy with my enough”.
That’s very good!
Happiness comes when you found your enough and you are perfectly peaceful with it. And it doesn’t mean “the end of the world”. Life is interesting by itself and there a lot of interesting things to discover. You always learn something new every day :)
I am 32,
1. Have a growing net worth – check! (went from -$47,000 on jan 2018 to 106,000 today) thank to you, from affodrdanything podcast
2. Be paid your value – check
3. Be able to float yourself for three to six months – Emergency fund
4. Be dedicating at least 20% of your income to short and long-term goals – Check,
5. Have a network of trusted financial sources – FIRE community
6. Start taking insurance more seriously – Check… Car, job
7. Consider a very basic estate plan – nope, still single
Pretty good!! You’ll be retired by the time the 45 y/o goals hit! ;)