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debtblag said:   If you've got thoughts or advice, I'd be happy to hear it.

††
As your asserts increase, specifically retirement accounts and other long investments, the corrections hurt even more in some ways. †

I'm invested in likely a similar way: aggressive, long-horizon, mostly low cost index funds. †I lost almost a year's pay during the recent correct. †I stopped looking...

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What's the word?

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Dus10 said:   What's the word?
Another ugly month.

Here's my: October 2015 net worth update

Debt: I paid off $1,300 bringing my total to -$89,000
Retirement: My investments decreased $100 bringing my total to $84,300
-----
Net worth: This went up by $1,100 to -$4,700

Of course, a $100 drop to an investment portfolio isn't too terrible, but what makes this troublesome is that I actually contributed $2,900 to my retirement accounts (including employer match).

My portfolio is aggressively allocated at 50-40-10, domestic stock-international stock-domestic bonds. The steeply sloping attached chart shows just the 10 percent drop these combined funds have seen over the last couple months.

October 2015 personal finance goals

Just to make sure I've still got the fire, I'm going to set some very aggressive goals for October in hopes of getting past $0.

Goal #1: Contribute $4,700 in total (again, including employer match) to debt and retirement. If the market's gonna be a jerk, I'm going to do my best to out-muscle it.

Goal #2: In order to make sure I have $4,700 left over to contribute, I'll do a "no-spend" month. Obviously, I'll spend money on things like rent and groceries, but no:

  • Eating out
  • Drinking at bars
  • Getting coffee at cafes
  • Taking cabs or Ubers
  • Buying new toiletries, clothes


Goal #3: Sell, give away, or otherwise rid myself of 100 things. Maybe I'll make a little more cash to send to debt and retirement. At the very least, I won't trip over so much stuff.

And that's that. See you all at zero!

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I challenge you to a race!

I'm at 105k loans and 100k retirement/ 35k cash. First one to 100k net worth wins?

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jd2010 said:   I challenge you to a race!

I'm at 105k loans and 100k retirement/ 35k cash. First one to 100k net worth wins?

† Yes! I'm totally in.

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Whats the wager gentlemen?

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debtblag said:   Time for a September net worth update.
...
Like a lot of folks, I was hammered by the market and for the first time since I started this thread, I was worse at the beginning of a month than I was at the start of it. A few lessons learned:

  • I've been spoiled over the past couple years; an important reminder that the market can also go down :/
  • My retirement portfolio is all in low-cost index funds, but aimed at the long term by being aggressively weighted toward equity; I just have to remind myself that month-to-month outcomes aren't as important as the big picture
  • Corrections suck >


I'm confident I can recover, but will of course do some serious thinking this month. If you've got thoughts or advice, I'd be happy to hear it.


As you said in your second bullet, investing for retirement is all about the long game. Those of us who have been in it for a long time have seen corrections last months, quarters and years. Key is to be comfortable with your asset allocation and have it be aligned with your risk tolerance. And don't let the swings get you down. If you find yourself being seriously affected by your losses, you should revisit your asset allocation/risk tolerance. Everyone thinks they are risk-tolerant in a bull market.

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Ma171aC said:   Whats the wager gentlemen?
Hmmm. Something inexpensive, but novel. I'm trying to come up with a pun for "six-figure man," possibly with a reference to The Princess Bride, but am coming up with nothing

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BostonOne said:   
debtblag said:   Time for a September net worth update.
...
Like a lot of folks, I was hammered by the market and for the first time since I started this thread, I was worse at the beginning of a month than I was at the start of it. A few lessons learned:

  • I've been spoiled over the past couple years; an important reminder that the market can also go down :/
  • My retirement portfolio is all in low-cost index funds, but aimed at the long term by being aggressively weighted toward equity; I just have to remind myself that month-to-month outcomes aren't as important as the big picture
  • Corrections suck >


I'm confident I can recover, but will of course do some serious thinking this month. If you've got thoughts or advice, I'd be happy to hear it.


As you said in your second bullet, investing for retirement is all about the long game. Those of us who have been in it for a long time have seen corrections last months, quarters and years. Key is to be comfortable with your asset allocation and have it be aligned with your risk tolerance. And don't let the swings get you down. If you find yourself being seriously affected by your losses, you should revisit your asset allocation/risk tolerance. Everyone thinks they are risk-tolerant in a bull market.

I'm pretty sure I'm good with it. The month-to-month changes only matter to the blog posts (which is another way to say they don't matter )

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Welp lets do this then!

Oct 2015 Update

Student Loans:
Current 105k @ 1.9% 5 yr (Paying 2k/mo minimum payment because of low rate, stockpiling the rest for emergency/liquidity)

Retirement:
94k (26k IRA, 68k 401k - Maxing ROTH & 401k every year, and stockpiling cash/short term bonus chasing/etc with the rest.)

Cash & Short Term $:
52k (All currently in bonus offer new accounts getting equivalent of 4 or 5% per year. †Also just got my quarterly bonus & ESPP execution so this cash level will likely decrease slightly over the next 6 mo, as my takehome will be <3k/mo as I throw it all at 401k to max before end of year)

Net Worth:
+41k

Plans for upcoming month:
Will be moving at end of the month so I expect some moving costs & new security deposits, and wont expect my net worth to change.

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Welp, might as well do this.

Nov. 2015 net worth update

My net worth is positive!

Over the past month, it went up a whopping $8,400 thanks in part to some big contributions -- which I was able to make thanks to a no-spend month.

The split was as follows:
Debt went down by $2,100 to $86,900
Retirement savings went up by $6,300 to $90,600 (Yes, definitely aided by the strongest month for stocks since 2011)

Perhaps most importantly, I feel like I was able to get some of that fire back by successfully doing a no-spend month wherein I didn't spend money eating out, buying coffee, drinking, buying electronics, hunting for hot deals and so forth. Gives me hope that I'll be able to finish the year strong.

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Congrats! Almost 3 years at it. Has to be nostalgic looking at the original post and seeing how far you've come.

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Congrats! One of the best threads on FWF.

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Congrats!

If you continue building your net worth at the same rate as you have been, how long until you're financially independent?

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JamesPolk said:   Congrats! Almost 3 years at it. Has to be nostalgic looking at the original post and seeing how far you've come.
†Thanks! And yes, pretty surreal at times.

I can really sense my mood changing as time goes by -- from blind optimism the first year, to fatigued realization the second year, and then shoots of a new hope this year.

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ryanstruve said:   Congrats! One of the best threads on FWF.
† High praise. Thank you

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psychoslowmatic said:   Congrats!

If you continue building your net worth at the same rate as you have been, how long until you're financially independent?

Thanks!

I'll run a simulation for fun. Besides growing net worth at the same rate, I'll make the following (not necessarily reasonable) assumptions:

  • No inflation
  • Maintain income
  • Maintain portfolio growth
  • Maintain spending level

    • iancee and I keep completely separate accounts
    • No kids


If all of those assumptions hold, then I'd have enough saved up to live out my days by†2024 (This is nuts)

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Okay, what about November?

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debtblag said:   
psychoslowmatic said:   Congrats!

If you continue building your net worth at the same rate as you have been, how long until you're financially independent?

Thanks!

I'll run a simulation for fun. Besides growing net worth at the same rate, I'll make the following (not necessarily reasonable) assumptions:

  • No inflation
  • Maintain income
  • Maintain portfolio growth
  • Maintain spending level

    • iancee and I keep completely separate accounts
    • No kids


If all of those assumptions hold, then I'd have enough saved up to live out my days by†2024 (This is nuts)

Way to go!

When I started a spreadsheet with a savings/retirement plan about 20 years ago, it just seemed like numbers on a page. The big net worth numbers at the end didn't really seem achievable starting from zero. It wasn't always easy to stick with the plan - dot com bust in 2000 and Great Recession got in the way. It's hard to believe I'm now within spitting distance of my ultimate goal. It's a great feeling and I can tell you that sticking to the plan was totally worth it despite the sacrifices.

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Dus10 said:   Okay, what about November?

Sorry for the slow update. First the numbers:

I paid off $900 of debt, to bring it down to $86,000
My retirement went up by $4,200 to $94,800
Combining the two, my be worth went up by $5,100 to $8,800 -- a 138 percent increase!

I guess the big thing to chat about is that back in October, after a couple frustrating months of trying -- and failing -- to get to net worth zero, I increased my 401(k) contribution to 50 percent. The funny thing is that I got so used to having it that high that I just left it there. Now, I'm real focused on trying to get my contribution for the year as close as possible to the $18,000 max as possible now that my student loan rates are so low.

And that was my month

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Congrats, good job, but IRS max for 2015 / 2016 is $18,000, not 17,500

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psychoslowmatic said:   Congrats, good job, but IRS max for 2015 / 2016 is $18,000, not 17,500

Thanks! I'll make the edit. I unfortunately don't think I can even break $16k this year since I was focusing on student debt for so long, but hopefully I'll manage to get to the max next year.

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debtblag said:   
psychoslowmatic said:   Congrats, good job, but IRS max for 2015 / 2016 is $18,000, not 17,500

Thanks! I'll make the edit. I unfortunately don't think I can even break $16k this year since I was focusing on student debt for so long, but hopefully I'll manage to get to the max next year.

† I wouldn't get too worked up about it whether you max out, or not. †If you are making this much progress, you will have the ability to retire much sooner than the retirement age for a 401k withdrawals. †I know that it is some sort of FWF sacrament, but once I got to $100k in my 401k, I stopped caring. †I put in enough to get the match, and then if I am getting burned on taxes too much, maybe a bit more. †At some point, I will probably switch to Roth 401k, but I plan on having more in investments outside of retirement accounts so that I can retire sooner than someone else would suggest.

rated:
Dus10 said:   
debtblag said:   
psychoslowmatic said:   Congrats, good job, but IRS max for 2015 / 2016 is $18,000, not 17,500

Thanks! I'll make the edit. I unfortunately don't think I can even break $16k this year since I was focusing on student debt for so long, but hopefully I'll manage to get to the max next year.

† I wouldn't get too worked up about it whether you max out, or not. †If you are making this much progress, you will have the ability to retire much sooner than the retirement age for a 401k withdrawals. †I know that it is some sort of FWF sacrament, but once I got to $100k in my 401k, I stopped caring. †I put in enough to get the match, and then if I am getting burned on taxes too much, maybe a bit more. †At some point, I will probably switch to Roth 401k, but I plan on having more in investments outside of retirement accounts so that I can retire sooner than someone else would suggest.

††https://www.bogleheads.org/wiki/Substantially_equal_periodic_pay...

tl;dr you can roll the 401k over to an IRA then withdraw from the IRA based on IRS rule 72(t). †It's no big deal to get around the penalty.

rated:
psychoslowmatic said:   
Dus10 said:   
debtblag said:   
psychoslowmatic said:   Congrats, good job, but IRS max for 2015 / 2016 is $18,000, not 17,500

Thanks! I'll make the edit. I unfortunately don't think I can even break $16k this year since I was focusing on student debt for so long, but hopefully I'll manage to get to the max next year.

† I wouldn't get too worked up about it whether you max out, or not. †If you are making this much progress, you will have the ability to retire much sooner than the retirement age for a 401k withdrawals. †I know that it is some sort of FWF sacrament, but once I got to $100k in my 401k, I stopped caring. †I put in enough to get the match, and then if I am getting burned on taxes too much, maybe a bit more. †At some point, I will probably switch to Roth 401k, but I plan on having more in investments outside of retirement accounts so that I can retire sooner than someone else would suggest.

††https://www.bogleheads.org/wiki/Substantially_equal_periodic_payments

tl;dr you can roll the 401k over to an IRA then withdraw from the IRA based on IRS rule 72(t). †It's no big deal to get around the penalty.

††Can you roll partial per year to keep the rollover tax @ near 0 for multiple years?† If so, how does it handle cost basis or capital gains on roll?† Evenly distributed against original contriubtions?

PS - Ill post my year end in a couple weeks for our 100k net worth race.

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psychoslowmatic said:   
Dus10 said:   
debtblag said:   
psychoslowmatic said:   Congrats, good job, but IRS max for 2015 / 2016 is $18,000, not 17,500

Thanks! I'll make the edit. I unfortunately don't think I can even break $16k this year since I was focusing on student debt for so long, but hopefully I'll manage to get to the max next year.

† I wouldn't get too worked up about it whether you max out, or not. †If you are making this much progress, you will have the ability to retire much sooner than the retirement age for a 401k withdrawals. †I know that it is some sort of FWF sacrament, but once I got to $100k in my 401k, I stopped caring. †I put in enough to get the match, and then if I am getting burned on taxes too much, maybe a bit more. †At some point, I will probably switch to Roth 401k, but I plan on having more in investments outside of retirement accounts so that I can retire sooner than someone else would suggest.

††https://www.bogleheads.org/wiki/Substantially_equal_periodic_payments

tl;dr you can roll the 401k over to an IRA then withdraw from the IRA based on IRS rule 72(t). †It's no big deal to get around the penalty.

† In my view, it is still just another set of rules that I would rather not deal... but I guess it is a decent option if that is where you have everything socked away.

rated:
Great news for the OP but these topics are precisely the reason I only visit FWF once a week now instead of every day. This used to be a great resource how to make another million when SIS and BBB were running things. Now its the suze orman dave ramsey show where poor folk come on here to ask questions. Is there a new site where the milionaires mingle?

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urepjj said:   Great news for the OP but these topics are precisely the reason I only visit FWF once a week now instead of every day. This used to be a great resource how to make another million when SIS and BBB were running things. Now its the suze orman dave ramsey show where poor folk come on here to ask questions. Is there a new site where the milionaires mingle?
††
Cool story bro.† Can we unsubscribe from your blog?

rated:
jd2010 said:   
psychoslowmatic said:   
Dus10 said:   
debtblag said:   
psychoslowmatic said:   Congrats, good job, but IRS max for 2015 / 2016 is $18,000, not 17,500

Thanks! I'll make the edit. I unfortunately don't think I can even break $16k this year since I was focusing on student debt for so long, but hopefully I'll manage to get to the max next year.

† I wouldn't get too worked up about it whether you max out, or not. †If you are making this much progress, you will have the ability to retire much sooner than the retirement age for a 401k withdrawals. †I know that it is some sort of FWF sacrament, but once I got to $100k in my 401k, I stopped caring. †I put in enough to get the match, and then if I am getting burned on taxes too much, maybe a bit more. †At some point, I will probably switch to Roth 401k, but I plan on having more in investments outside of retirement accounts so that I can retire sooner than someone else would suggest.

††https://www.bogleheads.org/wiki/Substantially_equal_periodic_payments

tl;dr you can roll the 401k over to an IRA then withdraw from the IRA based on IRS rule 72(t). †It's no big deal to get around the penalty.

††Can you roll partial per year to keep the rollover tax @ near 0 for multiple years?† If so, how does it handle cost basis or capital gains on roll?† Evenly distributed against original contriubtions?

PS - Ill post my year end in a couple weeks for our 100k net worth race.

† I'm at least 10 years away from using this so I'm not up on the math, but what you'd do is roll the total 401k to an IRA (basis/gains stay the same) then convert any amount you want to a Roth IRA. †I think that when you do that you have to pay taxes on the gains, so the cost basis of your Roth becomes the amount you rolled over. †I believe you have to prorate when you roll 401k to IRA (I.e., roll 10%, you get 10% of cost basis total, 10% of total gains) but I don't know if the IRS allows you to do this on a per 401k basis or requires you lump all 401k's together. †I do know they lump all IRAs of the same type together, for cost basis and gains you're considered to have one regular and one Roth "bucket."

Sorry for the thread jack, OP keep it up! †It's inspired me to go back over my expenses and actually calculate my savings rate, then try to improve it.

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urepjj said:   Great news for the OP but these topics are precisely the reason I only visit FWF once a week now instead of every day. This used to be a great resource how to make another million when SIS and BBB were running things. Now its the suze orman dave ramsey show where poor folk come on here to ask questions. Is there a new site where the milionaires mingle?
† You made me wonder how supercreditman is doing.

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Hereís to a successful 2016!

I have been following this thread since he started it and I realized DebtBlag and I are uncannily similar in graduation date, the amount of student loans, retirement contributions, & income, so I jumped on board to race him to 100k net worth! Iíve been working at it since late 2011, at which point I had ~140k loans, ~25k CC debt, 7k retirement, and 0 savings.

Year-end 2015 status:

Student Loans:
Decreased 5.1k since Oct to 99.9k (under 6 figures yay!) @ 1.9% 5 yr variable

Retirement:
Increased 6k since Oct to 99.9k (under 6 figures boo!) 401k near maxed for the year, came up a bit short after playing with the percentages each pay period

Cash & Short Term $:
Decreased by 10k since Oct to 42k (This is a bit of a misnomer, 4k went to GF short term loan, 2k went to precious metals purchase, 1.5k went to Amazon GCs at 10% off - thanks Chase. The rest was holiday spend + deposit on new apartment + dipping into cash to be able to max 401k by year-end. I'm not counting these in our race to make things a bit more even.)

Net Worth:
Increased by 1k since Oct to 42k

2016 Goals:
Win 100k challenge & get there by year-end!
Max retirement accounts (+23.5k net worth)
Take student loan balance down to sub $80k (+20k net worth)
Stockpile at least $1.5k/mo savings on top of the above. (+18k net worth)
Accomplishing this assuming 0% market return will get me to 42+23.5+20+18 > 100k net worth by year end 2016!

The sacrifice: Achieving this will require me to continue to live on approximately 2k per month, or about 35% of takehome pay. Living/food/insurance/gas/utilities/etc costs are expected to be about 1.6k/mo, so this leaves a $400/mo buffer for fun & unexpected expenses.

You're up debtblag!

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2016 Goals:
Max retirement accounts (+23.5k net worth)

This is where my first 23.5k in income goes each year. But there's also something else you can do which might make sense for you: get a high-deductible health plan that qualifies for a Health Savings Account. If single you can contribute $3,350 in it which is fully deductible and if married can double that amount. You can also invest it in the market if you go through a good administrator like HSA Bank.

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Hi there jd2010 and everyone else. Here's an update as we hit the start of 2016:

In 2015, I

  • Paid off $21,000 in student loan debt bringing the total down to $85,000
  • Increased my retirement savings by $42,000 to $100,000


Combining the two,

  • I increased my net worth by $63,000 ó to a positive $15,000 over the course of the year

Biggest events and corresponding lessons learned were:

  1. My employer 401(k) match vested worth a cool $12k. The lesson here is to take advantage of free money.
  2. I refinanced my student loans using SoFi, cutting my rate in half from nearly 8 percent to less than 4 percent. Besides the interest savings, this also made me feel more comfortable devoting more attention to retirement savings. Call it comfort or mental bandwidth; it really helped clear my mind
  3. I automated in a huge way -- in the beginning of the year, I increased my automatic student loan payment to $3,000 and then later switched that to withhold 50 percent of my pre-tax income to go straight to my 401(k). I guess the lesson is that I recognized my own weakness when I see more money coming in

To all- Thanks for reading, for the support, and the advice. Still working on my 2016 goals.

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