Wednesday, October 26, 2016

Getting To Know Me


Today I wanted to back up a bit and give a little background and overview to you all. I’ll try to do this type of thing periodically to save any new readers from having to scour the archives to learn the basics about us (cause let’s be serious, I know that nobody is interested in me enough to go through that amount of effort).

When I was 19 I choose to serve as a full time missionary for my church. I was sent to live in Zimbabwe for 2 years. I lived through some of the worst inflation rates in recorded history. I then started my college career at age 21 with a net worth of about $15,000. A year later I met and married my wife. She had just returned from serving an 18 month mission in Australia. We were both in college and neither of us had any debts. We combined our finances and produced a net worth of about $30,000.

My wife and I were both able to graduate from college debt free. My wife graduated at age 24, just a few months before giving birth to our first son and became a full time mom (approx. net worth of $47,500). I graduated 2 years later at age 25. When I graduated we had a net worth of about $80,000. Of this, we had $50,000 set aside as the down payment for our first home. We worked hard, lived cheap, made good financial decisions, and got really lucky as a result.

We began investing in the stock market during my last semester of college. We started out with about $10,000 in all stock mutual funds at Vanguard.

When I landed my first real job, a few months after graduation, we moved across the country and bought our first house. After having left my parent’s home shortly before turning 19 I had changed residencies 20 times in 7 years and I was ready to unpack and stay put for a while. We paid $174,000 for our 30 year old 3 bed 2.5 bath home. I wish we could have paid for it in all cash but we had to go into debt for the first time in our lives. We paid the mandatory 20% down and put the remainder of our $50k into a Vanguard mutual fund that had returned 10.3% annually for the past 3 years.

Now 3 years out of school we still live in the same house. We have 2 kids (hoping for many more) and only one income. I make a annual salary of $60,500. We invest 17% of my salary into my 401(k) and my company matches another 5% of that. After 401(k) contributions, insurance deductions, and taxes I take home $1,484.53 every two weeks, $612.50 of which goes straight to the mortgage. Leaving us with $872.03 every two weeks to cover all of our other expenses. We’ve set up a financial plan that incorporates our monthly budget, planned expenses we’re saving up for, and income to allow us to continue investing and paying down our mortgage faster than scheduled while not overstretching ourselves. We have been able to average about $300 per month that we invest into our Vanguard accounts and another $300 per month to paying down the principle on our mortgage early. 

We choose to drive used vehicles that we pay cash for so that someone else has to eat the largest portion of the vehicle’s depreciation in value and I can’t stand the thought of paying someone interest on a car loan. Our cars aren’t flashy, and mine might have a lot of problems, but they get the job done and have saved us a ton in the meantime.

I’m still searching for my passion project and what I want to do with my life. I don’t love my job but don’t know exactly what I would like to do instead. I started this blog as an attempt to find some of that passion, I love dealing with my personal finances and would love to be able to help others to better manage the resources that they have been given. While I would love to make money off of this blog and turn it into a full time income/business like several of my fellow PF bloggers, I don’t have any desire to make money my main goal here (though I would greatly appreciate any adds you click on and affiliate links you might sign up for). My purpose here is to share and dissimulate information not to make money, so any income is considered a side effect of helping others (by way of complete transparency, I’ve only made $132 to date, that’s like making about $0.25 per hour for all the work I’ve done here :) ).

I am a proud supporter of the Early Retirement movement and believe that anyone can retire early if they put in the effort. I don’t enjoy being a slave to my job and have set up a plan to allow me to escape that rat race much earlier than age 62 (current goal is age 37). But to me, early retirement doesn’t mean that I plan to sit around and do nothing while having to survive just on what we have saved up to that point. I plan on still working in my several decade long retirement but at activities that I want to do instead of just chasing the money. I plan to set it up so that we can survive off of our investments so that if I feel like taking a month off to go live off the grid or training for an ultra-marathon or whatever, I can do that without draining our reserves. If I feel like taking a job with a huge pay cut to see what it’s like, I can do that without putting our future in jeopardy. To me it’s all about the freedom to choose what I do each day without feeling dependent on my job.

I’m sure that there are many more things that can, and should, be added into this post that would help you to gain a better understanding of my life. But you might need to stay tuned for those ones. Feel free to ask any questions – I enjoy hearing questions and sharing openly.