Well done iceman!

Anyone taking full advantage of the mega backdoor Roth option? Most 401k plans still don't allow it.

https://www.thestreet.com/story/13525152/1/forget-the-backdoor-roth-ira-here-s-how-to-sneak-35-000-a-year-into-a-roth-ira.html

(Article written in 2016 so the contribution numbers have changed since then)

This thread and the How much to spend on a house? thread have me struggling with personal finance. My finances are very atypical.

I am 30 years old. I do not have a 401K and have a very low salary that I live off of. My primary compensation comes from an acreage carry/participation on Mineral purchases. I have been doing this for 7 years and have lived well below my means.

I have about $110k in my retirement account. The minerals have accrued over the years and are currently producing a little over $15k a month, which I have been shoveling into my retirement account,

That sounds great and it is, but it is almost all from new horizontal wells in the Central Midland basin, so it will decline rapidly. That said I have a lot of PUD's on the acreage. One of my partners chose to sell out and based on his sale (which I thought was a little low) my interest would be worth in the low 7 figures.

Point is the cash-flow is unreliable for a mortgage or really any fixed cost or luxury for that matter.

Being 30 I would like to buy house but am not really sure how much I should spend or where I should get the money from? I.E. asset sale, try to get a mortgage ect.

I am undecided on liquifying the minerals even partially. My cost is virtually nothing and I still think they have upside.

Any oil and gas guys have any advice on how to keep exposure while still having a life when you are first starting out?

A few general thoughts on this board.

1) Most at a minimum have a college degree from a Top 50ish school in A&M which has a good engineering and business school that provides for strong early career salaries.

2) People that post on the B&I board (much like boggleheads etc) have more than a passing interest in wealth accumulation/savings.

3) You're less likely to see people with lower balances post

4) Oil and gas pays wells as long as you're paid well

Mid 40s. $260M in a Roth 401k. 6% company match. Started contributing about 2006 salary was pretty low starting out. Haven't done the full 18M, just 15% of my income. Not a lot of selection in my employer-provided 401k. Half is in a Target retirement date and the other half is in a variety of index funds. Also contributing to 3 529's.

The product of poor dirt farmers. Paid for college as I went. Amazed by some of the figures being posted, but I'm proud of what I've saved. Next step is to get started investing in something out of the market. Land or rental property.

sts7049 said:

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I'm no expert, but every advice I've ever read is you never sell minerals

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I think that used to be true but prices have climbed quite a bit and the market has become more efficient.

More than that, I think that it is different if it is your primary source of income. With the salary/401k balances I see on here I would never advise most of you all to sell.

It makes up about 90% of my net worth, which was fine in my 20's, desirable even. Looking ahead to my 30's where it effects more than me is what makes me think about it.

If you do end up selling have multiple people review the discount

I wish someone would create a poll of: Who on this thread took my good friend Sally Guyton's class?

I'm not sure if Old Army knows who she is but the best take away I ever received from my finance degree was her saying "time is on your side." She pounded that saying into my head. I still have plenty of fun but learned to start investing early and often. The power of compounding is real.

I believe the saying goes "the first million is the hardest." The sooner that you can get there the faster it grows. I can say that I have not been around in a recession. I can say that I've seen my whole portfolio in stocks drop 15% in one day. Waiting it out and dollar cost averaging as well as managing risk is the best thing you can do.

Aggiesincebirth said:

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I wish someone would create a poll of: Who on this thread took my good friend Sally Guyton's class?

I'm not sure if Old Army knows who she is but the best take away I ever received from my finance degree was her saying "time is on your side." She pounded that saying into my head. I still have plenty of fun but learned to start investing early and often. The power of compounding is real.

I believe the saying goes "the first million is the hardest." The sooner that you can get there the faster it grows. I can say that I have not been around in a recession. I can say that I've seen my whole portfolio in stocks drop 15% in one day. Waiting it out and dollar cost averaging as well as managing risk is the best thing you can do.

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You mean Sally Joyner?

$127k (401k only) 31

Cyp0111 said:

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Time is on your side and don't buy expensive cars that depreciate heavily.

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Agree 100% about cars/trucks. This is an area where you can save a lot of $$$ in your 20s and 30s, and when factoring in 30-40 years of compounding returns, becomes a lot of cash when you are 60-70.

I drove a Toyota Tacoma for 15 years. And I got a tidy sum for it when I sold it. My average annual cost of ownership on that truck spread out over 15 years was ridiculously low. I replaced it with a 4Runner and plan to do the same thing.

$380k between me and wife @ 31

Need to hit around $4 mil to retire

Wish I had been a little more aggressive when I started 8 years ago. Was only doing 6% to get 4% match the first year. Ramped up slowly from there. Went to max contribution a couple years ago.

DannyDuberstein said:

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Cyp0111 said:

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Time is on your side and don't buy expensive cars that depreciate heavily.

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Agree 100% about cars/trucks. This is an area where you can save a lot of $$$ in your 20s and 30s, and when factoring in 30-40 years of compounding returns, becomes a lot of cash when you are 60-70.

I drove a Toyota Tacoma for 15 years. And I got a tidy sum for it when I sold it. My average annual cost of ownership on that truck spread out over 15 years was ridiculously low. I replaced it with a 4Runner and plan to do the same thing.

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Doing the same thing on my Toyota Tundra... although resisting the urge for something different (not necessarily new) can be tough at times...

30 years old, DI1K (though wife is self employed and doesn't make a ton)

Approximately $120k in 401Ks, which seems low now. I started work at 24, and I've always put in 10% and had an employer match. Sounds like I have some work to do!

DannyDuberstein said:

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Cyp0111 said:

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Time is on your side and don't buy expensive cars that depreciate heavily.

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Agree 100% about cars/trucks. This is an area where you can save a lot of $$$ in your 20s and 30s, and when factoring in 30-40 years of compounding returns, becomes a lot of cash when you are 60-70.

I drove a Toyota Tacoma for 15 years. And I got a tidy sum for it when I sold it. My average annual cost of ownership on that truck spread out over 15 years was ridiculously low. I replaced it with a 4Runner and plan to do the same thing.

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Did you buy new and drive for 15 years?

Yes. They hold their value so well that the savings from buying something 3-4 years old wasn't (and still isn't) enough savings for me. Since I knew I wanted it for such a long haul, being the only owner and knowing it's had its maintenance done right from the beginning was worth the difference to me. Bought it for $21 and sold it for $9.

I went through the same thought process with the 4Runner. Looked on the used market and the values of 3-4 year old vehicles weren't far from the price of one brand new. So I ended up going with new.

DId the same for he wife's new car. Our first new car ever. Had always driven hand me downs or bought used until 3 years ago.

Looked at the used versus new costs and it was almost the same to go new as used.....And she wanted the t-force edition the second she saw it. She understands this is her vehicle for the next 10-15 years and it is a good vehicle so I am good with it.

We did go the 2-3 years used route with my wife's last two cars (both Honda Pilots). The first was 2 years old and 15k miles when we bought it, and it had sizeable enough savings to make it worth it. Drove it for 9 more years. On the 2nd one now, although it was 3/36 when we bought it.

It helps that I have a very short commute and she's a SHM with no commute. Obviously, you can really extend the life of a car when you aren't putting 20-25k miles on it per year. That said, she piles up miles hauling kids around faster than I do with my commute.

Old, not enough (but catching up)

27, just cleared 100k in retirement (70 in 401K, 30 in IRA)

Started with just enough to get the company match in the 401k (4%). The stock market shot up pretty good the back half of the year I graduated and my 401k showed great returns, and it sparked me into really diving into investing.

I was saving pretty decently outside of tax advantaged accounts at the time, so the next year I maxed out an IRA (and every year since), and every time I got a promotion or yearly raise, at least half of that % raise went to increasing my 401k. The increase in take home pay with the new tax plan got me up to where I will max my 401k the first time this year.

My salary has increased 50% since graduation (plus a little more in the take home pay because of the tax plan), but my take home pay has only increased about 18% (and having replace a car I drove into the ground eats into a lot of that). However, now that I'm maxed out, every raise I get will actually decrease the % going to retirement, so excited for raises to really start feeling like raises.

wow! A lot of you are doing an amazing job.

37 - married, 2 kids
401k - 267k (company matches 5%)
IRAs/Other - 240k (including wife)
Company pension - ? haven't figured out the value of that one yet

I love this thread just for perspective. I do agree with all the points about this being skewed with graduates and people with higher balances willing to post. Encouraging to see a lot of savers with all the stats about the average person not having retirement savings

Putting in a pool and vacations slow us down some, but I'm good with that. My saving grace is that since i started driving 21 years ago, I've only had 2 cars. My 2004 is still going strong. Love not having car payments.

Quote:

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35 YO; $375k vested in retirement accounts. Thought that was pretty good but a lot of you are doing well.

About $10k of that is from my wife that hasn't worked in 7 years to take care of kids. Some of you with a wife contributing are lucky if you want to look at it that way.

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It is pretty good. I'm a couple years older than you with a little bit less. SI3K. These threads are good or bad, based on the kind of person you are. If you see the numbers and get inspired to fix your ****, then go for it. Else, just stay away from these. The data is biased, but that can be a good thing.

In the end, everything comes at a cost. High income people have huge demands on them. Dual income families can be stressful with young kids. Single income families can have income challenges. People are generally in their situations because they choose to be (profession choice, children choice, decisions they made, etc). Yes, people are doing well, but there's a good reason for it.

note: please don't get bent out of shape if you're the person who got laid off and struggled to find work, or crazy medical bills, etc. I am not talking about this situation.

Age 33 Married

401K ~$240K
Def Comp Stock- $100K
IRAs- $65K

Wife has another $300K in retirement accoutns

queso1 said:

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42 and nowhere near the posts on this board lol. Of course, I own my own law firm and commercial property. I'm amazed at some of the figures. I just hope you guys aren't wasting your youth saving too much.

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My wife and I were stashing around 30% of salaries into retirement accounts until she became a stay at home mother. It made us rearrange things quickly. Now we pretty much spend every extra penny on vacations and memories and I'm okay with that.

36 around $250k combined (purely a guess - I haven't looked at it in a few months)

The Anchor said:

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queso1 said:

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42 and nowhere near the posts on this board lol. Of course, I own my own law firm and commercial property. I'm amazed at some of the figures. I just hope you guys aren't wasting your youth saving too much.

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My wife and I were stashing around 30% of salaries into retirement accounts until she became a stay at home mother. It made us rearrange things quickly. Now we pretty much spend every extra penny on vacations and memories and I'm okay with that.

36 around $250k combined (purely a guess - I haven't looked at it in a few months)

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That's awesome. It just took me forever to get established and now I'm reaping the rewards. The problem is that starting a profession I lost all the early years on compounding (and cashed in all my IRA to open my firm). I've been playing catch up with auto investing for the past decade.

Luckily the wife has TRS so we won't starve.

Awesome Clavell. A story like yours is what I wanted to hear. You have great retirement savings. Do you have a paid off house, vacation home, etc.

What is your setup??

queso1 said:

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42 and nowhere near the posts on this board lol. Of course, I own my own law firm and commercial property. I'm amazed at some of the figures. I just hope you guys aren't wasting your youth saving too much.

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Definitely get your point. The biggest key for us was starting early and enjoying compounding returns. 10-15% of a salary is not a life-changing amount of $$$, and if you started saving that much from the beginning, your lifestyle never really misses it. We take at least one good vacation each year (sometimes two), my kids have engaged in expensive sports, etc. We just stayed modest in a few areas (like our cars), use miles/points to help cover vacations, and kept an eye on the small "splurges" so they don't pile up so quickly as to throw us off track.

Clavell said:

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58 - $2.15M retiring end of year
Wife - $1.15M retired

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What's your health insurance solution to early retirement?