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Whatever you drive - take care of it. Keep it clean. Helps stave off the new car itch if your vehicle still looks good and drives well.

Unless you are loaded, just wash your car at home! For lots of people that might be the only exercise they do.

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I plan on keeping my paid for 2008 Toyota LC (never financed) until my oldest turns 16 in October 2019.

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$416.67/month to wife's ROTH
$416.67/month to my ROTH

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not sure if anyone else has mentioned this yet, but the annual contribution limit for IRAs has been increased to $5,500 for 2013.

http://www.irs.gov/Retirement-Plans/Plan-Participant,-Employee/Retirement-Topics-IRA-Contribution-Limits

Seems like it's very helpful to have a wife that's working full-time too

Where are the buckets that some of you funnel your money once the Roth option is no longer available and you max out your 401k?

I have a lot of insurance folks trying to get me into Variable or Whole Life.

very interested in that answer as well...

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Where are the buckets that some of you funnel your money once the Roth option is no longer available and you max out your 401k?

I have a lot of insurance folks trying to get me into Variable or Whole Life

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I'm in this spot. I use the insurance as one of the options. It's not for everyone and there are VERY strong differing opinions on it...so get ready.







(I beg of the internet Gods......please, please, please don't let this turn into a "do the insurance...don't do the insurance thread". This has been AWESOME so far)

Nowhere close to having $1mm, but live by most of the posts on here advocating a frugal lifestyle. My income, while good, not great, and the fact that I have a little one and a non income generating spouse, doesn't allow me to put away enough money to achieve that milestone any time soon. I have no complaints about where I am financially. Of course, like everyone, I wish I made and saved more.

Things are slowly coming around though. Little raises here, temp assignments with per diem, bits of side income...I think I'll be alright long term.

Four years ago I bought a truck and financed it for 3 years...about $500/month. I paid the truck off with savings in 4 months, but have maintained socking away an extra $500/month for a new truck (or whatever else) someday. Same with my property taxes on my first home. We didn't have to escrow anything, so I took out $600/month to cover prop taxes at the end of ther year. My next house I had to escrow property taxes, but I've maintained taking $600/month and putting into savings. That's an extra $1,100/month that we're putting away on top of my roth, wife's roth, my 401k, and my wife's saving. It's shocking to see account balances after not checking (and simply forgetting about) for 5-6 months at a time. And it is nice knowing that I can live nicely on about half of my salary because we have been wise with our money. Even though my wife is 'only' a teacher, I can't wait until she is back working and we can put that extra money straight into some rental properties or something.

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Where are the buckets that some of you funnel your money once the Roth option is no longer available and you max out your 401k?

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Same here. I had someone try to sell us the insurance route, but we did not elect to go that direction.

[This message has been edited by Hoyt Ag (edited 2/5/2013 12:57p).]

thanks for the heads up ac04

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Where are the buckets that some of you funnel your money once the Roth option is no longer available and you max out your 401k?

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For my wife and I, we max out contributions to (non-deductable) conventional IRAs, put quite a bit into 529 plans for our kids, and then I have a brokerage account that I "play with" as a bit of a hobby. The 529 options are good since the principal we put in can be pulled out at any time if we really need it (knock on wood we never do) and with four kids 12 years and under and gives us the confidence that we'll be able to pay most/all of their higher education without going out of pocket much once they are in school.

For me it wasn't until I worked hard and smart enough to get a job that pays both a bonus and stock. For the last 15 years or so, 90% of both of those have gone into investments, mostly equities.

I've made some money on real estate, but not much. Was a landlord for a while and hated it: i believe the ony way to make money as a residential landlord is to have connections to get cheap financing and agent fees, or get your own license.

I;m 47 and don't have kids; that's the biggest factor. But basically sticking to sound spending practices, which for me means not worrying about the latest and greatest (I'm typing this on a Compaq running Windows XP that I bought around 2007) and as someone somewhere else said keeping cars, house, and life neat and clean so I don't look like I'm a vagabond, but manage my life wisely.

If you get the chance, check out the short movie The Accountant. Wisdom abounds.

$1mil is really not much esp if you are retired. If you take out 4% a year, that is only 40k to live on esp given inflation.

I think almost anyone can save a million in their lifetime and more importantly it is the quality of life you live.

Reports of the minimum wage janitor leaving a million to their school sounds great but what is the point of all that money and living in poverty?

Everyone needs balance in their lives.

I am lucky to Make alot of money and in the top 1%. I could live like a resident for 10 yrs and have 3 million in the bank without any investing by age 40 but what is the point of having money without enjoying it.

There are many events that bring me joy and satisfaction.

I get much greater joy when my daughter & Son runs up to me saying "I love you, your the best dad" than when I got my first 6 figure check at age 28.

I even got greater joy driving my BMW x5 at age 28 than when I hit $1 mil.

I know I "waste" alot of money and I could have more saved, but memories is hard to replace esp in my 20's and 30's.

MedAggie:

6 figure paycheck. Is that a one time bonus or recurring every other week?! I'm assuming you are a doctor.

I assume he meant annual paycheck.

I'm in the same boat but to hell with retiring poor

To me, being a millionaire +/- a couple 100K isn't about having a set amount of money so that I feel accomplished. It's about the freedom from the fear of losing my job. It's about independence and not about me having more than anyone else. It's about having enough money so that the work I do is a choice and not a requirement.

Sorry, That was supposed to be 5 figure first check.

If it was 6 figures, I would be retired by now

I have to pay off my student loans first, but I'll be done in the next 2 years. When that occurs I'll be 27 and I can finally start accumulating positive net worth. I read Dave Ramsey and it opened my eyes as to what I'm currently doing wrong and how I should learn to plan and spend more wisely

At least I have my stocks to keep me warm. Thank you aapl and citi bank!

Couple questions for you guys -

When did you have kids? My wife and I had our first daughter really young (not planned that way) and it immediately thrust us into the single income category since we wanted her to stay home and raise our children. I'd say we're in a place where we aren't paycheck to paycheck, but we're certainly not where I'd like us to be either. Just curious how kids impacted some of you guys that have done well on your plans.

How much do you keep in an easily accessible account (not necessarily asking for $$ amount, but more of an estimate compared to your monthly expenses) - I'm always wondering how much I should keep in our checking account versus savings. I always let my "fear" convince me to keep alot more of it in the account than I probably should. I think sometimes having too much in the checking account makes it easy to buy things I really shouldn't. Would love opinions on this as well.

Not a millionaire yet...

I have my true emergency fund at a different bank than my primary bank. The only access I have to that account is by going through a teller. That makes any use of those funds a more painful process and as a result, that account just sits there.

We had a similar situation as you with kids early in our marriage. We got used to living poor, so we have been aggressive with debt reduction, savings and investment with every raise. We increase our lifestyle some, but do the others more. I think it has us on a nice pace.

I interpret the question in this way: How can I be on track to financial security. Everything is relative.

The best one can do in a given circumstance is allocate and differentiate between what others/society tell you to what you are really wanting to achieve. For my family - we want to achieve financial security.

From here things like: automatic savings, aggressive spending $200/mo for food goals, investment allocation will all be answered. All you can do with certainty is take one step forward.

ZonaAgs post was awesome and mirrors what wife and I try to do.

That said, fundamentally, allocation with family security in mind is the key. Especially when young and starting a family. Understand asset accumulation schedules by age. Cant compare 50 yr old to 30 necessarily. Years 20-50 are the prime years to accumulate and the profiles at different ages will look quite different. Early year characteristics are to expand asset levels and save. Debt in the most stable or appreciating asset categories are seen in early stages(20,30, 40). Time is on your side. Over time in older years hopefully you move down the spectrum where categories like equity in home and investment balances are more.

Financial ratios are important to understand exactly where you are. Different situations allow for different allocations - for example, we have been with startups that have not offered 401k's mostly. Obviously, if they were there would be more allocation there to for tax bennys. For example right now we are pretty happy with something like:

Cash - 25%
Real Estate Equity (primary and Investment property combined) - 24%
Tax Def Investments (not liquid) - 11%
Investments (liquid) - 23%
Health Savings Acct (mostly invested) - 6%



[This message has been edited by mays04 (edited 2/11/2013 2:17p).]

[This message has been edited by mays04 (edited 2/11/2013 2:20p).]

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aggressive spending $200/mo for food goals

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No wonder you are so thin. Food is my downfall. I can do $200 in a week easy. Of course I have 2 kids also and a wife with better taste.

I like what Zona said about short burst of frugality. We do it occasionally, not all the time. About every quarter we have some kind of aggressive goal for a month or so...but it aint always..

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Couple questions for you guys -

When did you have kids? My wife and I had our first daughter really young (not planned that way) and it immediately thrust us into the single income category since we wanted her to stay home and raise our children. I'd say we're in a place where we aren't paycheck to paycheck, but we're certainly not where I'd like us to be either. Just curious how kids impacted some of you guys that have done well on your plans.

How much do you keep in an easily accessible account (not necessarily asking for $$ amount, but more of an estimate compared to your monthly expenses) - I'm always wondering how much I should keep in our checking account versus savings. I always let my "fear" convince me to keep alot more of it in the account than I probably should. I think sometimes having too much in the checking account makes it easy to buy things I really shouldn't. Would love opinions on this as well.

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I was 31 when we had our first child. Had two more; I was 35 when we had our 3rd.

We will pay bills and "spend" from our primary checking account. Paychecks are deposited automatically into that account. $500/mo automatically goes to my primary investment account. But that account doesn't have much in it on an ongoing basis. I'd say it doesn't accumulate anything. We pay for big items from the cash balance of the that investment account. We don't keep much in traditional savings since it is essentially dead money.

[This message has been edited by SpicewoodAg (edited 2/11/2013 3:25p).]

Random thoughts:

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always get the highest deductibles that you can afford on your house

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I will disagree with you on one minor point. If you live in North Texas, make sure you get the lowest deductible you can for your wind/hail damage rider which is typicall 1%. Not knowing any better we had a 2% deductible and when the Hail Storm here in East Dallas came through last year everyone lost their roofs, windows, cars, etc. I was out of pocket $2-3k because I had 2% instead of 1%. Dropping to 1% afterwards cost me about $150 extra per year. You will lose your roof in north Texas at some point so its a good bet.

Re:food. It's our Achilles Heel. We could probably retire 5 years earlier if our food budget and wine budget wasn't so ridiculous over the last 5 years. I'm embarrassed to even post what we spend in food but for 2 DINKS its been upwards of $2k in some months. We've scaled that way back in recent months because I was losing sleep over it. We've cancelled 2 of 3 wine clubs but will still drop $500 every couple of months restocking the wine fridge.

Other than that we save fairly well although we need to up the ante on savings vehicles outside of 401k. I did just open an account with our credit union which pays a ridiculous 4% in checking account with a few caveats that aren't hard to hit so that's a rare opportunity in this market.

Re: cars. My wife is conditioned to getting a new car every 4-5 years. So, as a compromise, we get her a CPO vehicle when that time comes and then I inherit what she was driving using my car as the trade-in. That way we always only have one car pmt. it was the best scenario I could get to with her so ill take it.

$2K a month for food/wine?

That is more than my PI payment on my home on Lake Travis.

I understand good food and wine. I buy/drink only good beer. Just not that much of it.

I can see it. I know couples with out kids who eat virtually every meal out. Lunch and dinner for 2 $50 to $75 per day is not unreasonable.

If u have read millionaire next door...then medags comments are spot on

the book identifies UAW's & PAW's (under & progressive accumulators of wealth

the book concludes that most doctors are UAW's...thus, someone that u expect to bs rich typically aren't

Formula is based on income & net worth

now medag is probably not your typical doc..but most docs try too hard to keep up with other docs in flagrant displays of wealth

I personally like the mantra, "it is better to be able to buy a Ferrari with cash than to drive a Porsche on credit" :-)

I think timing is everything for a large %.

In the mid 90's it was having some experience in the tech industry and getting a job that had stock options...... Dellionairs, etc.

Seems like those who got into the oil industry in the early 2000's are the good group to be in now. When I graduated in 2000, that industry was all but dead for new graduates.

And there are many more...

Ecclesiastes 9:11.... time and chance.

Read the book "outliers".
All of us have opportunities but we may not be in positions to take advantage of those opportunities due our own situation at the exact moment in time.

Looking back, I missed out on several significant opportunities.

My parents were frugal, not risk takers and my dad had a decent job (never made a lot of money). When they were in their mid 50's they had a once in a lifetime opportunity and had the financial ability and the experience specific to this opportunity and they capitalized .. then they had cash for the next, and the next. It is odd how it happens, but based on what I have seen; work hard, save (don't waste) and keep your eyes open.... and don't be afraid to learn.

Interesting thread.

My story:
Out of A&M in 04 and had a nice corporate sales job with fortune 400 company. Walked from that at 26 to be a photographer. Found out quickly that I sucked way too much to make it as a photographer. Spent two years being poor and learning. On my 28th birthday, I had a negative net worth. About five years later I am at around a quarter-million. Married at 29 (wife was an orphan and has no family wealth and no accumulated wealth.) We had a first child two months ago - I am 32. Wife quit her job when she was 3 months pregnant and will stay home. We hope to have 3-4 kids.

We save some, but not like most of the smart people on here. We are determined to enjoy life on the way. We take a nice vacation every year (we been to Destin, Sweden, Maui, Israel, Greece, Italy, Turkey together; she took a trip to NYC and Conn and I have taken several to Vegas and one to Norway.) We eat out too much. We own three cars, but I have never had a car payment and I paid cash for her car.

Thing that concerns me most about our future is that my business is a luxury service business. If I am somehow incapacitated, we aren't making income. If the bottom drops out of the market, business could be very bad. But the business is growing pretty substantially and I am developing a very good reputation.

Our only debt is the mortgage and her student loans. We have the house about 35% paid off. No consumer debt at all.

[This message has been edited by Guitarsoup (edited 2/14/2013 7:49p).]

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Thing that concerns me most about our future is that my business is a luxury service business. If I am somehow incapacitated, we aren't making income. If the bottom drops out of the market, business could be very bad

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I trust you have term life insurance, GS?

I do. Too cheap not to have a term life plan. And have started a trust for my kid.