I thought I would share a little bit about how I started off and where I'm at now in case anyone finds it helpful.
When I got out of school I had a job making a little over $20,000/year. When I read articles about maxing out 401ks and people 30 years old with x 100,000 dollars in their retirement and savings accounts, I could never understand how that is realistic for most people. Within 5-6 years at the same company I had worked up to making $65,000/year. That was enough to buy a modest house on one income in my area, and I could save a little toward retirement, but nothing earth shattering. Basically just enough to get the employer match on the 401k.
After those 5-6 years I got a bit burned out by the increasing responsibilities and travel time (working 40+ hours/week and traveling 10+ hours a week on top of that). I became self-employed for 3 years which worked out ok, but didn't really allow me to save much for retirement.
I took a job in a big city making around $75,000/year, which I thought was great. I rented an apartment by myself and bought (took a loan out on) a car, neither of which was 100% necessary, but neither was completely reckless, either. I was losing a few hundred dollars per month in savings, but for the first time I also started contributing the max 401k amount each year. I was in my early 30s.
When I started working there, I was told I'd make my salary, the $75,000 or so, plus a bonus of x % of my salary. However, the recruited told me the bonus would depend on me and my work, which was not true. Bonuses were funded by a pool that was based on complicated (to me) accounting metrics that are released at stockholder meetings. I got 0% bonus my first year, and bonuses were hit or miss after that.
I asked for 2 big raises, one after about 2 years and one after about 4 years. Both were granted. I went from $75,000 to $100,000 to $120,000. Now I was not only maxing out the 401k, but also well into the net plus savings/expenditures each month.
After 4 years I switched jobs to take on a higher position. I moved and started making $135,000/year. In addition to maxing out the 401k, I also started putting away about $2,000/month into a taxable retirement account.
At this point I have a clear path to a very comfortable retirement, at least a year's worth of expenses saved up, and can afford everything I want to do, within reason. I feel like I'm winning "the game." However, it took me 20 years to get here. And I definitely didn't feel like I was winning anything until recently.
A couple takeaways: First, the FIRE lifestyle isn't for me. If it is for you, great. If not, that's great, too. Second, I don't know how anyone with a reasonable but not amazing job right out of school has any kind of safety net for failure. It took me at least one, if not two, decades to be reasonably safe. There are things I could have done that were less risky/more responsible, for sure. However, I did my best to, for me, weigh the risks/benefits of the financial decisions I was making. And I would encourage others to do the same. Yes, having 6 months of savings is great. But how many people can get that on an entry level salary, and how long does it take? Saving 25% of salary, unrealistic for most, would take 2 years.
Good luck.
Submitted October 19, 2021 at 12:18AM by LobsterObvious1406 https://ift.tt/3lSlLms
