For the fourth month that I’ve been keeping track, I’ve made no headway in my overall net worth. In the first month the stock market took 5% off of my retirement accounts and I have yet to recover. I continue to invest maybe a little more than I should. I take solace in that I’m buying equity at cheaper prices now.
Defining a Long Term Goal
I realize it’s been a couple of weeks since I roughly defined my goal. It’s time to come up with rigid numbers though. I’m not quite comfortable giving exact numbers, so you are going to have to settle for ranges. Deal with it.
My net worth is currently between $150K and $200K. About 45% ($67.5K – $90K) of that is in retirement accounts. And while I should differentiate between the Roth and 401(k) because of the pre and post tax money, at age 30, this is just a rough battle plan. I have about 40% in the value of my primary residence. The remaining 15% or so is in cash or possessions (i.e. car, my new TV etc.).
As mentioned in the previous post, my fiancee will be earning a pension for life when she retires at age 41 from the military. I’m not sure if she’ll work a second career or not at this point. Without the second career, that pension will be a significant amount of the passive income that we need. I’d rather not that count that egg before it’s hatched. However, I’m going to have to include it in my calculation if my goal is be financially free in 11 years.
So how much money am I going to need to be financially free in 11 years? I’m going to make you wait just a little longer.
My “Comfortable Lifestyle” defined
I’ve been posting for a week now and I have an apology for all my readers. I have been glossing over my goal, copping out by just saying that I’m looking for “a comfortable lifestyle.” I already live a pretty comfortable lifestyle, but I want to be able to do it with the freedom to sleep late or travel to Italy on a whim.
As a 30 year old software engineer, I make more than average, but home costs in Boston seem to eat most of that. I have a little pressure on me. First there’s a lot of indirect peer pressure from my friends. For the most part they are doctors, lawyers, and business merger consultants. It’s pressure that I put on myself, but it’s hard not to want to keep up with Jones. That amounts to small beans to my main motivation. My fiancee is in the military and has been for 10 years now. In 10 more years, she’ll be eligible to retire with 50% of her highest salary for the rest of her life. That would retiring at age 41. More than likely, she’ll continue to work after that, but she’ll be a long ways towards that “freedom” that I mentioned ealier. I want to be there to share that with her.
If you had been hoping for hard numbers on my goals, I hope to compile them later this week.